Mr James Ndegwa, the Capital Markets Authority (CMA) board chairman. PHOTO | SALATON NJAU | NMG The Attorney-General has defended the appointment of James Ndegwa as the chairman of Capital Markets Authority (CMA) in a court case filed by activist Okiya Omtatah seeking his removal over alleged conflict of interest.
Mr Omtatah argues that Mr Ndegwa’s position at the regulatory agency is in conflict with his family’s diverse interest in regulated businesses including banking, fund management and publicly-traded firms.
The AG, who is also a member of CMA’s board, avoided addressing the alleged conflict of interest in his reply that highlighted the President’s prerogative in making appointments.
Besides Mr Ndegwa, the activist wants CMA’s other board members, including John Birech, Freshia Waweru, George Moibi, Thomas Kibua, Christine Okoth and Peter Mungai to be ousted.
In the case before the Employment and Labour Relations Court, the office of the AG Kihara Kariuki said that the President handpicked the CMA board members to ensure there was no vacuum at the agency.
He noted that in considering temporary and remedial appointments, the Head of State does not take into account competitive recruitment and can handpick people to State corporations so long as it is not unconstitutional.
Through a Kenya Gazette notice published on March 28, 2018, Mr Kenyatta reappointed Mr Ndegwa as chairperson of the capital markets regulator for a period of three years.
“The appointments were done in great national and public interest for a specific time in order to ensure continuity of the institution and that there would be no vacuum in the Capital Markets Authority board,” reads the grounds of opposition filed by the AG. According to Mr Omtatah, the CMA chairman has a conflict of interest to the “extent that he is a public official who regulates his private businesses”.
Since Mr Ndegwa’s appointment in April 2015, businesses in which his family has an interest have initiated or completed several mergers and acquisitions that were approved by the regulator.
These include last year’s merger between the former NIC Group and CBA Group that created the Nairobi Securities Exchange-listed NCBA Group, the country’s third-largest bank by assets.
MINORITY SHAREHOLDERS The Ndegwas own a stake of about 12 percent in the merged company, having previously held shares in both NIC and CBA.The family in 2018 also backed Delaware-based conglomerate Seaboard’s failed bid to delist Unga Group from the NSE.The Ndegwas own a controlling 50.9 percent stake in the miller […]