The Nairobi Securities Exchange (NSE) has appointed individuals recommended by stockbrokers to fill board vacancies in a move which could further ease tensions between the bourse and the traders.
Last week, the NSE picked Nancy Angano Noreh – a manager at Sterling Capital — as a non-executive director representing trading participants.
This followed the appointment of Thomas Mulwa, the chief executive officer of Liaison Group as an independent non-executive director, who was also a recommendation by the stockbrokers.
In June, stockbrokers demanded that the NSE appoint the pair as a measure to comply with their right to hold at least two seats on the board.
The NSE’s other directors are Kiprono Kittony (chairman), Frank Mwiti (CEO), Risper Alaro-Mukoto, Isis Nyong’o, Donald Wagunyu, Stephen Chege, John Niepold and Carole Kariuki.
The recommendation of the two latest appointees came at a time when traders were calling for Mwiti’s removal as chief executive, before a truce was reached that hinged on the appointment of directors aligned with the Kenya Association of Stockbrokers and Investment Banks (Kasib).
“Trading participants insist on their right to maintain at least two representatives in the board,” Kasib said in a demand letter to the NSE board in June.
Ms Noreh replaces Paul Mwai, the founder of the then AIB Capital, who resigned from the board.
Mr Mulwa takes the place vacated by the exit of private equity guru Michael Turner.
In July, NSE chairman Kittony informed this publication that the NSE would appoint two new directors as part of an agreement with stockbrokers to prevent the ouster of the bourse CEO.
“We have agreed that there is no need for the disruption of the market currently. We have kicked off a competitive process on the nomination of directors,” Mr Kittony said in a July interview.
As of August, stockbrokers were still demanding an extraordinary general meeting (EGM), signifying a failure to amicably resolve all issues raised, even after reaching a truce on the CEO ouster.
Kasib also demanded the amendment of the bourse’s articles of association, a review of its April annual general meeting and an assessment of the NSE’s public messaging and dividend policy.
It is unclear whether these matters have since been resolved, as calls and messages to the NSE chairman and Kasib chief executive officer went unanswered.
The stockbrokers argued that the notice calling for the April AGM had not been properly served to shareholders.
They claimed that any business conducted at the meeting was invalid and legally unenforceable, including the re-election of three directors.
Kasib also wanted the expulsion of shareholder representatives in the board committee that oversees deliberations on recommending and declaring dividends of the bourse.
Stockbrokers hold a 20 percent stake in the Nairobi bourse, while the top owner is a foreign fund comprising a family and an overseas pension scheme, which together hold a 23.82 percent stake.
Eight stockbrokers, including ABC Capital, Dyer & Blair Investment Bank, and Kingdom Securities Limited own stakes in the NSE directly, ranging from 1.34 to 2.69 percent.
