Thuo halts sale of Nairobi bourse

By Judy Ogutu

Plans by the Nairobi Stock Exchange (NSE) to sell part of its shareholding have been put on hold by the High Court. The temporary orders were issued on Monday by Lady Justice Jeanne Gacheche following an urgent application by a stock brokerage firm — Francis Thuo and Partners Ltd.

Through its advocate, Elisha Ongoya, the firm had applied for orders stopping the demutualisation of the NSE, pending hearing and determination of the application before court.

The stock brokerage firm has sued Capital Markets Authority (CMA) and named NSE Ltd as an interested party in the case. In 2007, CMA appointed NSE as a statutory manager of the troubled Francis Thuo and Partners Ltd for a period of six months, starting March 5, 2007. The period expired in September 2007.

On Monday, the judge allowed the firm to apply for orders compelling CMA or NSE to furnish it with monthly reports of NSE and CMA activities in the management of its business from March 5, 2007 to date. The judge also allowed them to apply for orders prohibiting CMA and NSE from going on with the demutualisation process that does not recognise and treat it as seat bearer at NSE.

It is understood that Francis Thuo & Partners, the broker that collapsed in 2007, is claiming its portion of one million shares agreed for each broker at a special general meeting held on July 6.

Under the sharing formula, each NSE member is to get one million shares ahead of the transfer of ownership to the public early next year. Francis Thuo, one of the oldest members of the NSE, collapsed with more than Sh200m in investor funds. The case will be heard on October 24.

— Additional reporting by James Anyanzwa.