CMC Holdings showroom on Lusaka Road in Nairobi’s Industrial Area. Photo/FILE
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The move has dashed hopes of shareholders looking to unlock funds held in the counter, which has remained suspended since September 2011 following boardroom wrangles.
CMA said it extended the suspension pending the disclosure of truce among the wrangling top shareholders.
The Capital Markets Authority (CMA) has extended the suspension of motor firm CMC’s shares from trading at the Nairobi Securities Exchange to June from end of this month.
The move has dashed hopes of shareholders looking to unlock funds held in the counter, which has remained suspended since September 2011 following boardroom wrangles.
The top shareholders of CMC Holdings agreed in February to withdraw all cases related to boardroom fights and the revamp of the board, setting the stage for the stock to resume trading at the Nairobi Securities Exchange.
CMA said it extended the suspension pending the disclosure of truce among the wrangling top shareholders.
“CMA notes a number of current developments affecting the company, including the execution of a Settlement Agreement between the major shareholders of the company in a bid to protect the best interests of the company and its minority shareholders,” said the regulator in a statement Thursday.
“CMA notes it is in the public interests for the suspension to be maintained pending the above disclosures being made to the shareholders and the public to inform prudent investor decision making.”
Among the cases to be withdrawn is a claim of Sh1.5 billion from Andy Forwarders, a company owned by the motor dealer’s top shareholder Peter Muthoka.
Under the deal struck by the shareholders, Mr Muthoka will nominate two directors to represent his interests at an annual general meeting expected to be held by April.
Mr Muthoka and his associate Joseph Kivai were ousted from CMC in March last year amid claims that they had used their positions to influence inflated payments by CMC to Andy Forwarders.
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 — which last sold at Sh13.50 each. Analysts expect the stock’s price to factor in the threats to CMC’s franchises when trading resumes.
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