Corruption: Kenya launches portal to report corporate fraud

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The Capital Markets Authority has launched a portal for whistleblowers to unanimously report malpractices by listed firms in a move aimed at tackling corporate fraud.

The portal, accessible through the authority’s website, allows whistleblowers to share anonymous but verifiable evidence to complement and support the CMA’s investigation and enforcement efforts.

CMA chief executive Paul Muthaura said the regulator is seeking to ensure the market operates at the highest levels of integrity.

The portal, he said, is one of the new avenues to pro-actively receive “constructive and sufficiently evidenced tips” to improve responsiveness and strengthen timely enforcement.

“We as an authority recognise the pivotal role whistleblowers can play in assisting to initiate eff ective investigations, which lead to sustainable enforcement actions,” Muthaura said in a statement.

Alleged governance malpractices has been blamed for cash flow challenges at Uchumi Supermarkets, Kenya’s sole listed retailer, which plunged into a Sh3.4 billion loss for the full year period to June 2015.

Kenya Airways suffered a Sh25.7 billion net loss for the full-year period to March 2015, the largest loss in corporate history in the country, in what has been linked to governance malpractice.

The regulator has come under fire for approving Sh2 billion corporate bond issues by the collapsed Imperial Bank, where alleged fraud started in 2013.

It was forced to suspend trade in the bond after the lender was put on receivership in October last year.

In its defence, the CMA said it grants approvals based on the information made available at the time of consideration.

And subject to undertakings that the disclosures in the Information Memorandum are complete, it provides all the information investors require to make an informed decision.

The authority hopes to use the portal to receive and respond to integrity failures of listed firms.

Whistleblowers will, through the portal, indicate the nature of the malpractice, the place, date and time of its occurrence, information on key suspects, and details of persons who can verify or provide more information.

 

Source: TheStar