The local subsidiary of South African ratings agency has been deregistered following restructuring at the parent firm.
The Capital Markets Authority said Global Credit Rating (GCR) made an application last year opting out of the Kenyan local market giving its clients 45 days to resolve matters with the firm.
“The Institution has notified CMA of their intentions to cease operations as a registered credit ratings agency to support restructuring process being undertaken within the Global Credit Ratings Group of companies,” CMA boss Paul Muthaura said on the Kenya Gazette.
GCR which rates up to 60 Kenyan companies has been used extensively to raise debt and shine a light into the financial health of local companies.
However, many Kenyan companies are no longer comfortable to let rating agencies pore through their books. Firms have resorted to avoid adverse ratings from the South African ratings agency.
A review of recent trends shows a damning trend of Kenyan companies opting to leave the agency as they face poor scores and their fortunes ultimately nosediving shortly after.
Over the last five years, 14 companies have withdrawn their ratings at GCR, some of which had been cited by the agency for poor outlook.
In fact, half of them quit in 2016 with 6 firms deciding they no longer want to have the review. Chase Bank, Bank of Africa Kenya, Fusion Capital Ltd, Industrial and Commercial Development Corporation (ICDC) and Shelter Afrique have all ceased to participate.
Cannon Assurance, Car and General, East African Cables, Kaluworks, KenolKobil, Mumias Sugar Company, Nakumatt Holdings, Real Insurance and Saham Assurance Company Kenya Limited have also left.