KENYA: CMA implements share sale restrictions for foreign investors

Wednesday July 1 2015

The Kenyan Capital Markets Authority (CMA) has ordered stockbrokers not to process any transactions for foreigners seeking to buy into companies already owned 75 percent or more by non-residents. As of the end of March this year, shares in Kenyan company Total Kenya were held by foreigners at 94.19 percent. Other companies have also breached the limits at one time or the other in the past decade.

The Capital Markets Foreign Investors Regulations 2002 sets out that in the case of ordinary shares of a listed company, if the 25 percent of shares reserved for local investors are not subscribed to in full, then after written approval from the authority the issuer may sell the shares to foreign investors. However, the CMA are keen to enforce this new order in cases where the allotted 25 percent is fully subscribed to by domestic investors.

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