CMC managing director Bill Lay. Single majority shareholder for the motor dealing firm, Andy Forwarders, through its CEO Mr Muthoka is seeking the removal of Mr Lay as MD. File
The High Court will decide on Wednesday next week whether an extraordinary general meeting for CMC shareholders requested by the embattled former chairman Peter Muthoka will proceed. (READ: Claims of insider trading emerge at CMC case hearing)
Lady Justice Mumbi Ngugi made the ruling after the wrangling parties wrapped up their submissions Thursday.
Single majority shareholder for the motor dealing firm, Andy Forwarders, through its CEO Mr Muthoka, is challenging the capital markets regulator’s powers to stop the shareholders’ meeting scheduled for November 21 at the Bomas of Kenya.
Through lawyer Fred Ojiambo, Mr Muthoka told the court that the Capital Markets Authority (CMA) had no jurisdiction under the markets Acts to determine the manner in which a shareholder may exercise his/her legal power under the Companies Act.
“Interfering with the petitioner’s right of convening the extraordinary meeting constitutes to a deprivation of the shareholders’ interest in its property in violation of Article 40 of the Constitution,” said Mr Ojiambo.
Mr Ojiambo further accused the regulator of acting discriminately against Mr Muthoka in favour of partisan interest of other CMC shareholders including the top management “who are in breach of Regulation 63 of the CMA general regulations.”
But the CMA, through Anjarwalla and Khanna Advocates, opposed Mr Ojiambo’s submissions on grounds that holding the extraordinary general meeting would derail the ongoing forensic audit into the company’s financial affairs.
CMA chief executive, Stella Kilonzo, has revealed that the motor dealer’s share trading at the securities exchange will be investigated.
“CMA is undertaking investigations into the operations of the company’s shares on the Nairobi Securities Exchange (NSE), including insider trading and breach of the regulator’s requirements,” said CMA’s lawyer. CMC is joined in the suit as an interested party. The regulator is also accusing Mr Muthoka of failing to disclose to the court the purpose of holding the extraordinary meeting on November 21 and indicated that one of the directors is under the regulator’s watch on accusations of financial impropriety. Mr Muthoka and Andy Forwarders is seeking the removal of the auto firm’s managing director Bill Lay and replacement of three directors.
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