By Independent Team & Agencies
Equity Bank survived being locked out of the Nairobi stock Exchange after two regulators battled over an attempt to suspend its custodial license for two weeks over alleged breach of regulations.
Equity’s suspension resulted from the bank failing to pay the Central Depository Settlement Corporation (CDSC) large amounts of money and an additional levy to its clients for fast-tracking transactions and a conflict of interest that has seen the bank’s shares post gains after a recent share split. The CDSC said the suspension arose from among others Equity’s failure as a CDA agent to remit KShs 47 million (Approx. Shs 1 billion) to the corporation that was collected during the Safaricom IPO.
The suspension would have seen hundreds of retail investors locked out of the market for a fortnight at a time when the Nairobi stock market is on the rebound.
However Kenya Capital Markets Authority (CMA) overturned the CDSC’s decision, allowing Equity Bank to execute its custodial duties as a central depository agent while the issue is being arbitrated by CMA.
According to the Kenya Central Depository Act 2000, the CMA was required to approve the suspension signed by CDSC chief executive and any suspension by CDSC should only be effected after consultation.
Defending the regulator’s decision, CMA had taken the action in the interest of investors and to preserve the integrity of the capital market.
Equity bank is in plans of cross-listing on the Uganda Securities Exchange after successfully starting operations in Uganda.