A Mumias Sugar Company shareholder has demanded that the Capital Markets Authority (CMA) explain why trading in the company’s shares remains suspended and what is being done to resolve the situation, and has given it 14 days to provide the requested information and clarification.

🇰🇪 Breaking It Down

Lawyers representing the shareholder have written to the CMA, saying the prolonged suspension has left investors unable to trade their shares while receiving limited information about the future of their investments.

They want the CMA to state when the suspension was first imposed, why it was imposed, and which laws were used to make the decision. They are also seeking details of any later decisions that allowed the suspension to continue.

Moreover, the shareholder is also seeking to know whether CMA has regularly reviewed the reasons for keeping the shares suspended and whether those reasons still exist. The lawyers want the authority to confirm whether Mumias has continued meeting its obligations to shareholders.

📌 What You Need to Know

Questions have also been raised about financial reports and other information that Mumias should provide to investors. The lawyers want CMA to confirm whether the company has complied with requirements on financial reporting, material disclosures, corporate governance and communication with shareholders.

Mumias' shares have been suspended since 2019, following the company's financial difficulties and placement under receivership. Since then, the company has gone through court battles, restructuring efforts and attempts to have its assets operated under a lease arrangement, while shareholders have remained unable to trade their holdings.

Although there have been periods when the sugar mill resumed operations, uncertainty over its financial position, ownership and restructuring has continued. The shareholder now wants CMA to clarify what this means for investors whose money remains tied up in the company.

The lawyers have cited Regulation 75 of the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023, which provides a framework for a suspended company to submit a resumption proposal with a view to resuming trading within 12 months.

CMA has been asked to confirm whether Mumias has submitted a resumption proposal and, if so, what conditions remain before trading can resume. If no proposal was submitted, the lawyers want the authority to explain why.

They have also asked whether CMA has considered delisting Mumias shares under Regulation 74. The provision allows delisting in certain circumstances, including prolonged failure to meet continuing listing requirements.

📰 Source: Kenyans.co.ke