BOC Acquisition by Carbacid Halted by CMA Tribunal Vacancies
BOC acquisition by Carbacid has been stalled by vacancies at the Capital Markets Tribunal.
The Tribunal’s vacancy has made it unable to hear the case seeking to stop the proposed acquisition of BOC Kenya by Carbacid Investments, leaving the transaction in limbo.
The deal was announced in November 2020 and was challenged at the tribunal in March last year.
This was by BOC’s minority shareholder Ngugi Kiuna who argues that Carbacid undervalued the target company with its offer of Sh1.2 billion or Sh63.5 per share.
The tribunal has not acted on the application due to lack of quorum, the Capital Markets Authority (CMA) said.
“It has not been quorate and therefore it can’t hear the matter.
The secretary and another member must be appointed by the Judicial Service Commission (JSC) following the decision of the High Court in consideration of petition 197 of 2018,” the regulator said.
“The court held that the Capital Markets Tribunal (amongst others) is a subordinate court and therefore vacancies should be filled through JSC.”
CMA noted that previously, the Cabinet Secretary for National Treasury and Planning would appoint tribunal members.
The court said members of the executive should not appoint tribunal members.
Besides the lack of proceedings at the tribunal, the proposed transaction faces another objection.
The objection is from a separate minority shareholder who filed an application at the High Court.
Carbacid and investment firm Aksaya made a joint bid to acquire 100 percent of BOC.
Carbacid’s chairman Dennis Awori recently told shareholders that the company is still keen on pursuing its proposed buyout of BOC.
This is despite the legal hurdles that have delayed the transaction which was initially expected to close in July last year.
Amid the deadlock, BOC’s share price has risen to trade above Carbacid’s offer, closing at Sh72 yesterday.
BOC’s majority shareholder BOC Holdings had committed to sell its 65.38 percent stake to Carbacid and Aksaya.
The other minority shareholders were to decide whether to take or reject the offer.