PAY DAY

NSE listed firms line up AGMs after court ruling

ScanGroup had moved to court to challenge CMA’s order on deferral of those meetings in line with coronavirus prevention measures

In Summary
  • CMA had asked listed entities to postpone AGMs to a later date but instructed boards to approve and disburse dividend payouts to members.
  • The order cushions listed firms from court action should a shareholder or interested party challenge decisions reached through the virtual meetings.
British American Tobacco finance director Philip Lopokoiyit with group chairman George Maina and former East Africa group managing director Chris Burell during the firm’s AGM meeting in Nairobi / ENOS TECHE
British American Tobacco finance director Philip Lopokoiyit with group chairman George Maina and former East Africa group managing director Chris Burell during the firm’s AGM meeting in Nairobi / ENOS TECHE

A host of companies listed on the Nairobi Securities Exchange (NSE) have lined up Annual General Meetings (AGM) to effect board changes, pay dividends and adopt audited financial statements.

Yesterday, firms including British American Tobacco, Stanbic Bank Kenya, Diamond Trust Bank, Old Mutual and Total Kenya Plc issued AGM notices in local dailies, most slated for Friday.

This, after the court, ironed out confusion sparked by contradicting statements from Capital Market Authority (CMA) and Central Bank of Kenya in the wake of the government’s freeze on meetings and movements to curb the spread of coronavirus.

The capital market regulator had asked listed entities to postpone AGMs to a later date but instructed boards to approve and disburse dividend payouts to members.

CBK on the other hand directed banks to adopt electronic voting on critical issues linked to AGMs like dividend payment in the quest to have the majority of owners approve board decisions that affect shareholders.

The two contradicting statements from regulators put listed lenders in limbo, fearing penalties and lawsuits in case they chose an order to follow.

The court ruling issued by Justice David Majanja early last month however allowed listed companies whose internal rules do not provide for virtual Annual General Meetings (AGMs) to hold online shareholder meetings.

Nairobi bourse-listed ScanGroup had moved to court to challenge CMA’s order on deferral of AGMs.

The order cushions listed firms from court action should a shareholder or interested party challenge decisions reached through the virtual meetings.