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CMA set guidelines for NSE listed firms to hold AGMs during the covid-19 pandemic

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The company applied to the High Court under Section 280 of the Companies Act, 2015 for appropriate orders and direction.

An employee points to stock information displayed on an electronic screen inside the Nairobi Securities Exchange Ltd. (NSE), in Nairobi, Kenya, on Tuesday, Dec. 8, 2015. The government had planned to plug the 2016-17 fiscal deficit with about 240 billion shillings of external borrowing, and about the same amount raised on the domestic debt market. Photographer: Riccardo Gangale/Bloomberg

The Capital Markets Authority(CMA) has set rules for firms listed in the Nairobi Stock Exchange (NSE) to conduct their Annual General Meetings during the covid-19 pandemic.

This follows the High Court ruling which allowed WPP Scangroup Plc to convene and hold a virtual general meeting, subject to compliance with the provisions of the Capital Markets Act and the Regulations.

The company applied to the High Court under Section 280 of the Companies Act, 2015 for appropriate orders and direction.

The Court ordered and directed that any company listed on the NSE, which finds it impracticable to conduct a general meeting due to the COVID-19 pandemic or other justifiable reason, be allowed to hold virtual general meetings subject to a No Objection from CMA.

Prior to this, most of the listed firms were restricted by their Article of Association to hold virtual general meetings.

“The court’s decision will benefit all listed companies that could not hold virtual general meetings due to the Articles of Association restrictions. Listed companies will apply to the Capital Markets Authority for a no objection, to proceed as directed by the court,” CMA said in a statement.

The listed firms will be required to issue a statutory notice to shareholders on the intended general meeting and obtain a No Objection from CMA least 14 days prior.

They will also need to set out in detail in the request to CMA, how the meeting will be held, whether virtual, electronic technology or a hybrid of both.

The companies need to confirm and demonstrate that shareholders shall be provided with a notice of the general meeting as provided for under the Companies Act 2015 and sufficient information to make informed decisions on any resolutions placed before the meeting.

Firms are also required to provide shareholders with sufficient opportunity to ask questions and seek clarifications from directors as well as an opportunity to vote, with clear registration and voting procedure.

CMA had earlier allowed all listed companies with urgent matters such as payment of dividends to proceed to do so subject to ratification by shareholders in the next possible AGM.

“This court order supports the Authority’s strategic objectives of leveraging on technology and facilitating innovation in the capital markets,” CMA said.

Meanwhile, CIC Insurance has been allowed to proceed with sale of its assets transaction subject to a virtual circular while Co-0perative Bank, Kakuzi and BAT have been allowed to pay dividends.