STOCK EXCHANGE

High noon for rogue traders?


BY JACKSON OKOTH



The writing of an epitaph on the tombstone of a powerful clique of stockbrokers and investment banking barons, who have controlled the Nairobi Stock Exchange (NSE) for more than four decades, may have begun.

This follows Treasury’s appointment of bespectacled Central Bank of Kenya (CBK) governor Emeritus Micah Cheserem, a technocrat and one of the blue-eyed boys behind former President Moi’s invincible economic advisory council during the past Kanu era.

But while the market is still teeming with opinion that is dismissive of the newly appointed Capital Markets Authority (CMA) chairman, hinged on the thought that this job description needed a new face, the haemorrhage at the NSE persists with investors holding shares whose values are rapidly falling.

Following last week’s announcement of Cheserem’s appointment by Finance Minister and Deputy Prime Minister Uhuru Kenyatta, the market ignored this new development, instead remaining bearish as the NSE 20 share maintained its movement south.

But this may not deter the thick-skinned Cheserem, a man used to cold shoulder treatment. When he first entered CBK as non-executive director in 1984, the then governor Philip Ndegwa ignored him on the first day and even refused to meet him for orientation.

This is recorded in his autobiography, The Will to Succeed, which provides a glimpse into Cheserem’s world of at the CBK, littered with debris of infighting with corporate raiders within in the banking industry, during his acrimonious tenure at the institution.

For a man who had to sell his shoes as a boy to raise school fees, while schooling in the rough terrains of Kerio Valley, Cheserem is a piece of work, with the fingerprints of a man steeled to succeed, all over him.

Born 1948 in Kapkobil village, Seko-Keiyo district, Cheserem’s academic life and professional career sprouted out of a scholar at the Strathmore College where he trained as an accountant.

He then worked for several companies in the private sector between 1971 and 1993 when he was appointed CBK governor.

His footprints in the corporate landscape include a stint at the Lonrho’s East African Extract Company (EATEC) as a trainee accountant, Chief Accountant at East African Industries (Unilever), blue chip multinational companies during those days.

Considered a moderate, independent-minded with a clean pair of hands, Cheserem belonged to the reformists’ class during the Moi era, a technocrat who made for his lack of a degree of masters in economics, by cleaning up and shutting down all political banks, closing the tap and riding the industry of Kanu’s corruption networks.

He came into CBK at the height of a major crisis with some 17 banks collapsing between 1993 and 1994 as the industry went through its worst crisis yet.

It was after this massive haemorrhage within the financial sector that Cheserem was picked from the private sector, to clean up the mess.

Between July 1993 and April 2001, Cheserem settled on a job that involved sanitising the country’s entire financial system, including mopping up printed cash, pumped into the system through political banks, to finance the 1992 multiparty general elections.

He says in his autobiography that if he had known the acrimony, infighting and mess that awaited him at CBK, he would have declined the job at CBK.

It is still unclear whether Cheserem has been briefed on what awaits him at the capital markets.

Whatever is out there, Cheserem will be relying on his credentials to restore confidence in a market that is hurtling downhill.

He will be expected to restore sanity to the capital market that is going through its worst moments, especially after the Safaricom IPO debacle.

Foreign investors have also taken flight as the global financial meltdown, which erupted in September last year, hit all financial markets, the NSE included.

His job will also include ensuring that millions of investors, who lost their money when Francis Thuo and Nyaga stockbrokers went down, are paid their money.

Disentangling an entrenched clique of powerful stockbrokers and investment banks, who have controlled the CMA, CDSC and the NSE remains a potential minefield.

There is a dominant class of rich investment bankers, seen as lenient to fraudsters, which currently holds sway and has influence on who sits on the NSE board and runs the show at the CMA.

An apparent slowdown in a demutualisation of the NSE has been attributed to this camp, which has refused to surrender the NSE bus log book, while insisting that it remains the driver of a bus full of pick pockets.

Cheserem is up against this powerful network, alleged to have favoured appointment of former East African Cables boss Peter Mwangi as NSE boss and locked out CDSC-Central Depository and Settlement Corporation boss Rose Mambo from the seat.

ENDS……………./



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