The board of the Nairobi Securities Exchange (NSE) says it will call an extraordinary general meeting (EGM) after failing to amicably resolve issues brought forward by stockbrokers, including questions on the legitimacy of its last annual general meeting(AGM).
The stockbrokers represented by the Kenya Association of Stockbrokers (Kasib) say their previous engagement with the NSE only yielded partial resolutions of matters expressed earlier in June.
Kasib has retained four issues on its agenda, including a proposal to amend the articles of association, the regularisation of the company’s 71st AGM in April 2025, public messaging, and dividend policy.
NSE board Chairman Kiprono Kittony says the bourse will set a date for the demanded extraordinary general meeting to address the issues highlighted by Kasib alongside other shareholders.
“They are still calling for an EGM, which is within their rights. We will have the EGM, but we are yet to set a date,” he told Business Daily.
“Whatever it is that they are asking, we will ask the shareholders what their opinion is. We will answer their questions in front of the shareholders at the AGM.”
The Capital Markets Authority (CMA) does not provide explicit guidelines on the calling of an EGM, but lists guidelines on annual general meetings for listed companies, which require the board to provide all its shareholders sufficient and timely information concerning the location and agenda of the general meeting.
Kasib and the NSE held discussions in July concerning issues raised by the stockbrokers who combined hold a 20 percent stake in the company, with the Chairs of both boards meeting to resolve the issues amicably.
In a fresh letter dated July 31, Kasib suggests that the meetings were not successful in exhaustively addressing all issues, hence requiring stockbrokers to push again for an EGM.
“In our letter, we outlined a raft of issues that prompted our decision to make this request. Subsequent to this, we accommodated yourselves by holding several meetings over the last two months as the chairs of our two organizations sought to amicably resolve all the issues raised,” Kasib said in a letter addressed to Kiprono Kitonny.
“In your letter dated June 17, 2025, you graciously and promptly responded to the matters we raised and indeed provided solutions to some. However, there are still outstanding pertinent issues that have not been addressed.”
Stockbrokers want the NSE articles of association to be amended to ensure that two directors are elected to the bourse’s board to represent the trading participants.
Kasib also says that the NSE has not made any attempt to demonstrate that the notice for the April AGM was properly served to shareholders.
Stockbrokers state that all business conducted during the AGM may be deemed invalid and legally unenforceable, including the re-election of three directors.
The trading participants also want the NSE to affirm that only licensed brokers are authorized to execute trades on behalf of investors.
Kasib also wants clarity on the dividend policy and wants board representatives of shareholders to be removed from the delegated committee that deliberates, recommends, or declares dividends of the NSE.
These items are informed by the gross violation of the principles of corporate governance by the NSE board of directors, which has permitted the representative of the largest shareholder of the company to chair the Board Committee that deliberates, recommends, and declares dividends. A clear and glaring conflict of interest,” Kasib added.
Last month, the NSE said it would appoint two new directors to its board as part of an agreement with stockbrokers to prevent the ouster of CEO Frank Mwiti amid concerns that the spat could harm the bourse’s performance.
The NSE Chairman at the time said that the board was at the tail end of resolving the trade representative issues, including appointing their representatives as directors.
Kasib previously fronted Nancy Noreh, a manager at Sterling Capital, to occupy a vacant seat left by the resignation of Paul Mwai, who represented brokers on the board.
Tom Mulwa, the managing director of Liaison Group, was also fronted to occupy the seat of independent director left vacant by the exit of private equity (PE) guru, Michael Turner.
