CMA and CBK have issued a conflict over how organizations should pay dividends in regard to the suspension of the Annual General Meeting (AGM’s) caused by the coronavirus restriction measures.
Both CBK (Central Bank of Kenya) and CMA (Central Market Authority) agree that AGMs should be frozen in an attempt of controlling the virus by shunning away large gatherings. However, the two have different opinions on how payment of dividends, changes in executive post and approval of accounts should be carried out.
CBK wants banks to adopt electronic voting to have the majority of the shareholders approve board decisions without holding AGMs. The listed banks are those with large numbers of shareholders such as Standard Chartered Bank of Kenya, Equity Group, Co-operative Bank, NCBA, Diamond Trust Bank and Absa Bank Kenya.
CMA has allowed all listed firms at the Nairobi Security Exchange to pay dividends without holding AGMs. It has given directives that shareholders should seek approval from investors in a meeting held at a later date.
The two conflicting directives have left bankers, especially from the ten listed lenders and Kenya’s top banks who are regulated by both CBK and CMA.