KENYA Law and Practice Contributed by: Sammy Ndolo, Brian Muchiri, Damaris Muia and Nicole Gacheche, Kieti Law LLP
5.5 Disclosure by Shareholders in Publicly Traded Companies Shareholders in publicly traded companies in Kenya are subject to various disclosure obliga - tions, some of which are outlined below. Notification of Holdings Above Certain Thresholds Any person obtaining “notifiable interest” (ie, 3% or more) in shares of a listed company or who ceases to be interested in such shares to notify the listed company of the acquisition or cessation of interest in the shares. The Licensing Regulations also require that listed companies report to the NSE on a monthly basis: • all persons who have acquired or cease to have a notifiable interest in its shares; • all directors holding 1% or more in the rel - evant share capital; and • cumulative holding of the relevant share capi - tal by directors. Disclosure Obligations for Ultimate Beneficial Owners Subject to certain exceptions, companies incor - porated in Kenya to file a register of beneficial owners. A beneficial owner is a natural person who holds at least 10% of the shares or voting rights or has the power to change directorship or significantly influence the company. Shareholding Disclosures Listed companies must publish detailed infor - mation about their shareholding, including: • a quarterly disclosure to the NSE of every person who holds or acquires 3% or more of the listed company’s ordinary shares; • publication by a listed company in its annual report of: (a) distribution of shareholders; and
All private or public companies must provide members with at least 21 days’ notice for annual general meetings. For other types of meetings, a 14-day notice period is required. However, a company’s articles of association may specify longer notice periods. Members may request that directors convene a general meeting. In such an instance, the direc - tors must respond by scheduling the meeting within 21 days. The Companies Act permits hybrid or virtual meetings. Notices for such meetings must clear - ly outline how to join and participate. Addition - ally, companies must adhere to the provisions of their articles of association regarding the con - The Companies Act acknowledges the concept of shareholder derivative claims, which can be made on behalf of a company. In the context of these claims, “member” encompasses not only those listed in the company’s register of members but also individuals to whom shares have been transferred or transmitted by law. This means an applicant does not necessarily need to be offi - cially recorded as a member or possess a share certificate. It is sufficient to demonstrate that they are beneficially entitled to the shares in question. The grounds that the court will consider to permit a derivative claim include negligence, default, breach of duty, and breach of trust by a company director. Courts in Kenya have held that permission to commence a derivative claim will be denied where the suit is not in the inter- est of or of benefit to the company and where the company has authorised the proposed act. duct of general meetings. 5.4 Shareholder Claims
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