NSE has been seeking ways to manage issues raised about the recovery board. PHOTO | FILE The Capital Markets Authority (CMA) confirmed that an agreement has been reached with the NSE to operationalise the board after the resolution of all outstanding issues.
Under the arrangement NSE will be required to put companies on the recovery board in consultation with the regulator — CMA.
The companies to be put on the recovery board include those that are technically insolvent, those under receivership and statutory administration, those facing corporate governance and management issues and those perceived to be high risk.
Nairobi Securities Exchange (NSE) has received the nod to put troubled listed companies on the recovery board after close to three years of a tussle on whether the proposed board would help breathe new life into the ailing stockmarket.
The Capital Markets Authority (CMA) confirmed that an agreement has been reached with the NSE to operationalise the board after the resolution of all outstanding issues.
“We have finally agreed with NSE and we gave them a go-ahead to operationalise the board,” CMA chief executive Wycliffe Shamiah told The EastAfrican .
Shamiah said companies with outstanding reporting and corporate governance issues pushed to the recovery board would be given opportunity to defend themselves.
“NSE now needs to start going through the process of identifying these companies, for instance Uchumi. In the process of operationalising every company will be given some opportunity to explain themselves before they land on that board,” Mr Shamiah said. Eligibility criteria
Under the arrangement NSE will be required to put companies on the recovery board in consultation with the regulator — CMA.
The implementation of the recovery board has faced opposition from quoted firms, which say the trading platform will impact adversely on perception by investors.
The NSE has been seeking ways to manage issues raised by some of the companies likely to be on the board. Last year the regulator reviewed the eligibility criteria for shortlisting firms on the recovery board prior to being delisted by excluding firms with working capital challenges.The companies to be put on the recovery board include those that are technically insolvent, those under receivership and statutory administration, those facing corporate governance and management issues and those perceived to be high risk.Companies with working ‘short term’ capital challenges will be spared.Financially troubled firms including those that fail to comply with disclosure requirements, those that delay in reporting financial results […]
