CMC showroom in Nairobi. Motor dealer will hold its first annual general meeting in more than two years after a hiatus prompted by boardroom wrangles. FILE
What you need to know:
AGM comes after two years and sets stage for share trading at stock market.
The meeting will set the stage for resumption of trading at the Nairobi Securities Exchange (NSE) following its suspension in September 2011.
The AGM was to take place this Friday before it was postponed to next month.
Motor dealer CMC Holdings will hold its first annual general meeting in more than two years on June 12 after a hiatus prompted by boardroom wrangles.
The firm’s acting managing director, Mary Ngige, said the AGM will set the stage for resumption of trading at the Nairobi Securities Exchange (NSE) following its suspension in September 2011.
The auto dealer was supposed to hold its AGM before June 4, 2011 in line with the law that compels companies to hold the meetings not more than 15 months after the last one which was in March 2011. But boardroom wrangles and court cases linked to shareholder spats prompted the auto dealer to seek exception from the 15-month rule.
The Capital Markets Authority (CMA) reckons that the 15,000 or so shareholders can now meet following a truce among the top shareholders. The meeting was to take place this Friday before it was postponed to next month.
“The AGM will be held on June 12. The annual reports have been sent out to shareholders today,” said Ms Ngige on Tuesday evening during an event to fete the dealer’s clients.
“We are working with CMA towards the relisting of our shares soon. Holding the AGM was one of the conditions set by the regulator.”
The boardroom wrangles were set off by the ouster of Mr Muthoka as chair on September 8 last year after he was accused of breaching corporate governance standards by being head of the auto firm’s boards and a CMC supplier, Andy Forwarders.
Four directors, including Andrew Hamilton, former chairman Jeremiah Kiereini, former Attorney General Charles Njonjo and businessman Richard Kemoli, have retired from the board over the past two years.
The top shareholders of the firm agreed in February to withdraw all cases related to boardroom fights. Among cases to be withdrawn is a claim of Sh1.5 billion from Andy Forwarders.
Under the deal struck by the shareholders, Mr Muthoka will nominate two directors to represent his interests at the AGM.
Analysts expect the stock’s price, which last sold at Sh13.50 each to factor in the threats to the business especially the loss of the Land Rover franchise.
CMC posted a net profit of Sh105.3 million in the year ended September 2012 compared to a loss of Sh181.1 million the previous year as sales stagnated at Sh11.7 billion.
The company did not declare any dividend. At its peak in 2008, CMC made a net profit of Sh927.1 million and paid a dividend of Sh0.45 per share.
