Bizna

CMA faces probe over Sh. 13.5 billion Cytonn scandal


The Capital Markets Authority, CMA, is in soup following a multi-billion scandal that has rocked investment firm, Cytonn. This comes as Garissa Township MP Aden Duale asked Parliament to take action against the CMA for failing in its regulatory role.

The MP said the estimated total losses incurred by investors in Kenya due to CMA’s negligence  is in the tune of  the tune of Sh. 36.8 billion. “This has brought into question the effectiveness and efficiency of the CMA in regulating the capital markets in Kenya,” he said.

Duale has cited instances which point to the failure of the CMA to regulate the capital markets effectively in total disregard of Section 11 of the Capital Markets Act. He said in 2005 the Imperial Bank Ltd allotted Sh. 2 billion to bondholders despite having ongoing financial fraud within the bank. “The bank eventually collapsed together with investors’ funds under the watch of the CMA.”

The lawmaker further wants CMA cited for clearing Chase Bank to issue Sh4.8 billion worth of bonds in 2005, after which the bank fell into receivership.

He holds that the bank subsequently fell into receivership with the investor’s funds and later sold to SBM Holdings, as a result of poor regulatory oversight by CMA.

Duale also cited the case of Nakumatt Holdings Supermarkets which in 2018 issued Sh. 4 billion commercial paper and thereafter defaulted on the same, resulting in write-offs by banks and suppliers. “In 2018, the Nakumatt Holdings Supermarkets issued Sh. 4 billion commercial paper and thereafter defaulted on the commercial paper resulting in write-offs by banks and suppliers,” he said.

For Sh. 100 one-time pay, Kenyans to get 1GB, 100mins monthly for life

“The chairperson of the departmental Committee on Finance and National Planning should provide a statement on the total number of all the unregulated capital markets products in the country and the number of investors in the said products.”



Source link

Related posts

Career profile of new Kenya Power CEO Bernard Ngugi

Kenyan Review

Jeff Bezos to lose World’s Richest Person title after divorce

Kenyan Review

Emirates offers Dubai return tickets at Sh. 34,000

Kenyan Review
%d bloggers like this: