Following investigations into alleged irregularities at the troubled motor vehicle dealing firm CMC Holdings; Kenya’s Capital Market Authority (CMA) has recommended a limit to the age of Directors of listed companies. The proposal demands that directors over the age of 75 be barred from holding positions on boards.

The current capital market regulations require any director aged over 70 years to seek special exemption to continue serving on the board. However, shareholders are expected to be notified at an annual general meeting if there is intention to retain such director after which shareholders approval will be sought.

“The recommendation to have the directors quit was made, but it is not yet law which we can implement,” acting Capital Markets Authority (CMA) chief executive Paul Muthaura said in an interview on the sidelines of an investor protection conference in Nairobi.

The proposal to retire directors who are aged over 75 was first made public by CMA chairman Kung’u Gatabaki after investigations into alleged irregularities at the troubled motor vehicle dealing firm CMC Holdings.

“I think there was confusion as to what was to happen following the recommendations from investigations into the CMC affair,” said Muthaura.

The directors of CMC got embroiled in a highly publicised row among themselves, and also with the regulator, after claims were made that former chief executive Martin Forster had siphoned the company’s funds to a secret off-shore account.

In a related development, the CMA has revealed that it has recovered more than Sh95 million from fraudsters since the establishment of the capital market fraud investigations unit three years ago.

A total of 475 reported cases, 32 arrests made and 45 cases were filed in court since its inception in 2009.

“The total recoveries made by the unit from 2009 to May 2012 amounts to Sh95,703,159.00,” said Muthaura.

The CMA also reported that there has been a significant decline in fraud cases in the capital markets in the country since the formation of the Capital Markets Fraud Investigation Unit in May 2009 but said that there is need for more reforms in the markets to ensure successful prosecution of fraud cases to boost investor confidence in the market.

Muthaura said fraudsters have now grown smarter in covering up their tracks and finding a safe haven to hide finance acquired through illegal means in the offshore accounts.

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