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Kenya’s CMA develops new rules on suspension and delisting of firms

Published on September 17, 2015

Kenya’s capital market regulators have developed new guidelines to govern the suspension and eventual delisting of companies that flout listing regulations.

The new regulations are a response to concerns over the increasing number of companies that are sliding into the negative working capital territory, putting investors’ wealth at risk and undermining investor confidence in East Africa’s largest stock market.

Working capital is the liquid money companies need to spend on regular business expenditures. It is the difference between current assets and current liabilities.

According to the proposal on the suspension and delisting of listed companies, offenders will be suspended for six months before being delisted. The Capital Markets Authority (CMA) will also have powers to institute immediate suspension of listed companies, if it deems fit, to protect the interest of the investors, pending review of the case. Read more. Source | The East African