Politics and policy
From left: Mr John Ngumi, Kenya Pipeline Corporation (KPC) board
chairman; Mr James Ndegwa, Capital Markets Authority (CMA) chairman; and
Dr Gachao Kiuna, Kenya Investment Authority (KIA) board member. PHOTOS |
FILE
By CHARLES MWANIKI, cmwaniki@ke.nationmedia.com
In Summary
- Mr James Ndegwa, CMA chairman; Mr John Ngumi, KPC board chairman; and Dr Gachao Kiuna, KIA board member face a huge conflict of interest burden that could complicate their performance in the new positions.
Three of President Uhuru Kenyatta’s recent appointees
to the boards of State corporations and regulatory agencies are facing a
huge conflict of interest burden that market watchers said could
complicate their performance in the new positions.
NIC Bank
chairman James Ndegwa, who was appointed the chair of capital markets
regulator CMA, tops the list of those in the conflict of interest
dilemma, having been named to head an agency that regulates a market in
which he has significant interest.
Mr Ndegwa’s family is a major shareholder in NIC
Bank, a public listed lender that is under Capital Markets Authority
(CMA) regulation. The bank has two subsidiaries, NIC Capital and NIC
Securities, which are also licensed and regulated by the CMA.
The CMA board chairman is a powerful position with
the authority to gazette new market regulations and take administrative
action against issuers and market intermediaries in breach of the
rules.
Mr Ndegwa’s appointment, which stockbrokers have welcomed,
means that he will potentially have to arbitrate as part of the CMA
board on matters touching on firms under his stewardship or in which he
has significant interest.
Former CMA chairman Kung’u Gatabaki said the
potential for conflict of interest remains high in the case of Mr Ndegwa
and the CMA position.
“Based on good corporate governance, one must
resign as a director of publicly traded companies upon becoming a
regulator. In my case, I resigned from Mumias, TPS Eastern Africa and Uchumi where I held directorships when I became the chairman of CMA,” Mr Gatabaki told the Business Daily.
Mr Gatabaki reckoned that while the law does not
prohibit the CMA chairman from being a director of a public listed
company, separation of the two should be observed in practice.
“What happens when the company in which you are a
director becomes the subject of investigations or regulatory enforcement
by CMA?” posed Mr Gatabaki.
The list of those facing conflict of interest in
their new positions also includes investment banker John Ngumi, who was
appointed the Kenya Pipeline Corporation (KPC) board chairman, and TransCentury CEO Gachao Kiuna, who will sit in the board of the Kenya Investment Authority (KIA).
Mr Ngumi is an experienced investment banker who
has extensive knowledge of the East African investment and deal making
environment and is currently Standard Bank’s director for investment
banking coverage in East Africa.
He established Standard Bank’s East Africa
investment bank unit in 2004, though he ceased holding operational
control of the unit in 2009 to focus on deal origination.
Standard Bank has been playing a bigger role in the
financing of Kenya’s mega energy sector projects, and last year was
selected as one of the lead arrangers for the Sh70 billion 310 megawatt
Lake Turkana Wind Power project.
Mr Ngumi’s experience in closing deals and raising
project finance for companies was seen as one of the main drivers in his
appointment as chair of the Konza Technopolis Development Authority
(KoTDA) in 2012.
No comments :
Post a Comment