An investor has filed a case at the Capital Markets Tribunal contesting the extension of the suspension of the trading of Kenya Airways (KQ) shares at the Nairobi Securities Exchange (NSE).
The appellant, Mihr Thakar sued the Capital Markets Authority (CMA), KQ, and NSE for breach of law, protesting that the reason for the suspension of trading of KQ shares at the bourse was no longer valid.
“That the Respondent erred in law and in fact by extending a suspension whose initial cause had faded away”, the Court document under Appeal number 001 of 2024, seen by cnyakundi.com stated in part.
Capital Markets Authority announced to the public via a notice dated 2nd January 2024 of the extension of the suspension of trading of the shares of Kenya Airways Plc. The notice was gazette on 4th January 2024 paving the way for a fifth suspension since 2020.
KQ has been facing headwinds and was scheduled for operational and corporate restructuring and government buy-out when its securities were suspended from trading at the bourse on 3rd July 2020.
Capital Markets Act
At that time, CMA stated that the suspension would last three calendar months. However, subsequent suspensions in September 2020, April 2021, January 2022, January 2023 and now January 2024 is hurting minority investors as per the lawsuit.
“The Respondent erred in law by making a decision that is, prima facie biased against the interests of minority shareholders of Kenya Airways Plc. The principle in law behind the Respondent’s power to suspend shares is pursuant to section 22 A of the Capital Markets Act is to ensure that there is a fair, transparent and efficient operation of a securities market. The Respondent also has a duty to ensure that there is a proper and integral management of systematic risk in the securities market,’ Mihr Thakar avers.
As per section 22 B of the Capital Markets Act, suspension of trading in a particular company’s shares should not last more than three months. Mr Thakar further accuses the defendants, CMA of being ‘unreasonable’ in suspending trading in KQ shares for over a year stating that is it ‘disproportional and unjustified’.
Mr Thakar who owns over 71,075 KQ shares, is presented on a pro-bono basis by lawyer Francis Njoroge of IC LAW ADVOCATES LLP. The case that was filed yesterday, 16th January 2024, is set for mention on 25th January at 2:30 pm for directions.
The law under Section 35 of the Capital Markets Act gives the Capital Markets Tribunal the authority to hear and determine such an appeal.
Here is the rest of the document Appeal 001 of 2024: Capital Markets Tribunal
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