A day after the capital markets regulator ordered Muramati Sacco Society to stop advertising its share sale, the organisation was yet to pull down promotional material of the offer on its website.
Sacco chairman Samuel Muturu said top management officials held a meeting with Capital Markets Authority officials on Wednesday, but declined to discuss the outcome of the meeting.
“We will comply with everything agreed,” said Mr Muturu, refusing, however, to explain why the Sh200 million share offer was still being promoted on the Sacco’s website.
The CMA declined to respond to our queries on what steps it would take to enforce its directive.
On Tuesday the capital markets watch dog ordered Muramati to stop offering shares to the public and discontinue advertisements of the share sale, which it said did not have regulatory approval.
The share issue began on October 1 and was due to close on Friday.
Muramati was inviting applications for shares from existing and new members which were priced at Sh10 for a minimum of 100 shares and a maximum of 100,000.
Mr Muturu, told the Business Daily that about 4,000 investors had already committed their funds at the time the CMA issued the directive.
Capital requirements
Share offers advertised to the public and those targeted to over 100 individuals requires the company to issue a memorandum, which must be approved by the CMA.
“Section 30A provides that no person shall in Kenya, offer its securities for subscription or sale to the public or a section of the public unless prior to such offer, it publishes an information memorandum signed by or on behalf of its officers and files a copy thereof with the Authority” said CMA in its statement in which it ordered the Sacco to stop the share issue.
“Every information memorandum must comply with such requirements as may be prescribed by the Authority and the offer should be made in accordance with the requirements set out in the Capital Markets (Securities) (Public Offers, Listing and Disclosure) Regulations” the statement added.
According to information on the Sacco’s website, Muramati, which had a share capital of Sh107 million and 56,121 shareholders as of December 2009 intended to use the funds to comply with new minimum capital requirements of the Sacco Societies Regulation Authority.
According to the regulations that came into effect this year, all deposit taking Saccos are required to have a minimum share capital of Sh10 million and further raise it to Sh20 million over the next four years.
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