The Kenya Electricity Generating Company (KenGen) has clarified the ‘illegal’ appointment of some board members during the company’s 69th Annual General Meeting held virtually by shareholders.
‘There is no term limit under this section 2.4.2 of CMA Code of Governance but after nine years, the Board Member continues as a non-independent Director upon re-election by shareholders. Thus, the election of the two Directors is within the provision of CMA Act,’ the company wrote in a statement.
Earlier in the day, a screenshot of a newspaper article appeared to have called on the illegality.
KenGen is a public listed company and is regulated by the Capital Markets Authority and also a parastatal which falls under Mwongozo Act.
While the provisions of CMA are true, those of Mwongozo might have been flouted by the parastatal.
KenGen is a public listed company listed in the Nairobi Securities Exchange and is regulated by the Capital Markets Authority Act (Cap.485A) and the regulation is the Capital Markets Code of Governance for Issuers of Securities to the Public 2015.
“Chapter three of the CMA Act section 3.1.1 (e) vests the power of voting to shareholders where every shareholder has the right to participate and vote at the general shareholders meeting including election of Directors. The Government in a listed company is a shareholder with voting rights thus can vote for a non-independent Director, ‘ KenGen continued in its statement.
The energy producer insisted, ‘ The two Directors were proposed by respective shareholders in writing in accordance with the Articles of Association of the Company. The two Directors respectively made a decision to accept in writing, the nomination by the respective shareholders’.
The appointment of the two appear forced, same as appointing a former military man as board chair.