CMA and NSE need to tighten their rules in regards to public companies.

In a paid advert, CMC Group Managing Director, William Lay, wrote a letter addressed to his company’s shareholders. The authoritative letter that was published in Kenya’s major dailies on September 14, 2011 touched on pertaining issues that were abused by the company’s immediate former chairman, Peter Mathoka.
He disclosed the fact that the former chairman had a vested interest in the very company that he was leading. The bone of contention is that the CMC is a listed company and therefore the general public has invested in it and naturally the it is expected of the Management and Board of Director to be beyond reproach if at all the members of public were to have confidence in it.
The fact that the former chairman is the major of supplier of the company in itself contravene the Companies Act Cap 486.It is therefore important that proper measure to address this misnomer is taken.
It is unfortunate that CMC has lost close to Kshs.2billion in inflated invoices by Andy Freight Forwarders Services over the last 5 years. It is hard to understand how auditors failed to take note of this over the same period yet the company is under professional management.However,the answer lies in the fact that the a major supplier happened to be part and parcel of the company’s management.
Capital Market Authority and Nairobi Stock Exchange—the watchdog bodies of the general public wealth in listed companies—need to take exercise their authority in ensuring that investors’ assets are safeguarded.
They can do so by ensuring that all managers and directors of listed companies in NSE are thoroughly vetted to avoid instances of compromise.Again, they need to crack down on insider traders who manipulate the share prices.

James Mwangi Kanyi
Nairobi