Traders at the Nairobi Securities Exchange. Ngenye Kariuki & Company Stockbrokers will soon resume handling transactions at the bourse.
Ngenye Kariuki & Company Stockbrokers are preparing to resume handling transactions at the Nairobi Securities Exchange after the statutory managers appointed to run the firm leave.
Ngenye Kariuki, the chief executive and majority shareholder of the brokerage, said the firm is recruiting staff to take over from the statutory managers who were appointed by the Capital Market Authority (CMA), the industry regulator.
Handing over
“We are re-launching and should be coming back in the market by May,” said Mr Kariuki, adding that the statutory managers were in the process of handing over the operations.
The firm was suspended from trading after it ran into financial difficulties precipitated by fraud from its staff and clients following the 2008 Safaricom initial public offer (IPO).
The change from a manual system to an electric one left loopholes that exposed brokers to fraud from both within and without, Mr Kariuki said.
Francis Thuo and Partners, Discount Securities and Nyaga Stockbrokers were other indigenous brokers which fell victim to fraud and poor management.
Francis Thuo and Partners fell in 2007, followed by Nyaga Stockbrokers in 2008 and Discount Securities in 2009.
Ngenye was placed under management on February 5, 2010 after losing an estimated Sh100 million during Kenya’s biggest IPO.
The CMA appointed Ronald Ng’eno to run operations.
“Going forward, the Authority will be working with Ngenye Kariuki & Company to ensure full compliance with the requirements for licensing of stock brokers before consideration is given to lifting its suspension from trading at the Nairobi Securities Exchange,” said CMA chief executive Stella Kilonzo at the time.
Shareholders agreed to pump in additional capital into the company to improve the firm’s liquidity and sold a 10 per cent stake to three new investors.
“It is confidential but I can say the amount injected was no less than Sh100 million,” said Mr Kariuki.
Since it went under statutory management it has seen a slight dip in its client base to about 80,000 clients from 96,000 said Mr Kariuki.
Ngenye Kariuki’s return comes at a time when the NSE is planning to be quoted on the bourse which is expected to happen by 2014.
The NSE has allocated shares to all the 22 stockbrokers who are owners of the bourse as part of demutualisation, separating ownership and management of the NSE.
Allocation of shares to the 22 members will pave the way for demutualisation.
