An investor at the Nairobi Securities Exchange. FILE PHOTO | NMG
The Capital Markets
Authority's demand that public listed companies that are operating below
the required capital and liquidity requirements move with speed to
comply is a step in the right direction.
Even more
reassuring is the demand that those in breach of the rules craft and
regularly submit plans for remedial action. This later demand speaks to
the regulators understanding of the rampant
callousness among business leaders in our midst. Left alone to comply on the promise that they will do so almost certainly never works.
callousness among business leaders in our midst. Left alone to comply on the promise that they will do so almost certainly never works.
It must, however,
be understood that the CMA is acting in the pursuit of the greater
public good. This is because collapse of any of these companies would be
bad for the shareholders, workers, suppliers and ultimately the
economy. The tough compliance conditions for the companies in breach is
partly meant to convey the message that the regulator is ready to act
proactively in its quest to protect the interests of investors and
nurture economic growth.
In the past, an apparent lax
in monitoring of companies' and lack of stringent enforcement of
standards have resulted in companies collapsing with billions of
investor funds. It is not beyond imagination that perhaps with the
latest action will prevent a possible degeneration and ultimate collapse
of these firms.
No comments :
Post a Comment