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CIC Insurance directors raise stake with 1.9m more shares

CIC Insurance Group chief executive Tom Gitogo. PHOTO | FILE
CIC Insurance Group chief executive Tom Gitogo. PHOTO | FILE 

Directors of CIC Insurance Group led by the chief executive Tom Gitogo have bought an additional 1.9 million shares in the company, raising their combined stake by 55 per cent.

Nine directors of the insurer, including chairman Japheth Magomere, Peterson Kagane, Gordon Owuor and Rosemary Githaiga held 5.5 million shares as of December, up from 3.6 million the year before.

The increased investments by the board members are disclosed in CIC’s latest annual report, with the purchases seen as an indicator of their confidence about the firm’s future prospects.

Mr Gitogo, who was appointed chief executive of CIC in January last year to replace Nelson Kuria, said the share purchases are informed by the depressed price of the stock and confidence about the firm’s future prospects.

“The directors and any other investors obviously buy shares if they believe in the future of a company,” Mr Gitogo said in a telephone interview.

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He bought the most shares, tripling his ownership from 300,000 shares to 1.5 million shares currently worth Sh6 million based on CIC’s market price of Sh4 per share on the Nairobi Securities Exchange.

Mr Gitogo was followed by Ms Githaiga whose ownership increased from two million shares to 2.5 million shares with a market value of Sh10.3 million.

Mr Magomere bought an additional 112,000 shares, raising his holding to 672,000 shares worth Sh2.6 million.

Mr Kagane, the vice chairman, bought 40,000 shares to raise his ownership to 240,000 shares valued at Sh960,000.

Other directors who also bought more shares in the company last year are Gordon Owuor, Michael Wambia, Jonah Mutuku, Peter Nyigei and Harrison Githae.

Of the 12-member board, only Veronicah Leseya, Mary Mungai and Philip Lopokoiyit do not hold shares in the company.

Substantial ownership of shares in companies they lead is usually seen as a way of aligning the interests of directors and managers with those of shareholders by participating in the payoffs from strategic decisions.

The increased investments saw the combined stake of the nine directors rise to 0.21 per cent from the previous 0.13 per cent, with the insurer having 2.6 billion issued ordinary shares.

The purchases came as CIC’s stock was on a steady fall from the peak of Sh11.9 in September 2014. The share price has dropped further, touching new lows of Sh4 at the NSE on Tuesday.

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