What you need to know:
- The firm had been rocked by boardroom wars in recent months that led to its shares at the Nairobi Securities Exchange being suspended and the removal of three directors including its former chairman and top shareholder Peter Muthoka.
Former Attorney-General Charles Njonjo quit the board of CMC Motors in June 2012, ending a boardroom career that spanned 40 years.
Mr Njonjo told CMC in a letter dated May 28, 2012 that he was retiring because the troubled firm was in the “hands of directors of impeccable integrity and a diligent management team.”
The firm had been rocked by boardroom wars in the preceding months that led to its shares at the Nairobi Securities Exchange being suspended and the removal of three directors including its former chairman and top shareholder Peter Muthoka.
“In light of the foregoing, and as discussed last week, I hereby now write to tender my notice of retirement effective 1st June 2012,” said Mr Njonjo in the letter.
His exit came barely days after the Capital Markets Authority (CMA) told Parliament’s Finance Committee that it is waiting for a High Court decision on matters related to the boardroom wrangling before acting on directors who have been named in a forensic report as having breached various regulations or were part of criminal activities that have cost the company millions of shillings.
A forensic audit report by Webber Wentzel, the South African auditor that the capital markets regulator hired to investigate alleged malpractices at CMC, found that Influential businessman Jeremiah Kiereini along with former attorney-general Charles Njonjo were signatories to the offshore accounts into which more than Sh250 million were kept illegally.
CMA said it would ask directors mentioned adversely in the report to drop their board positions in Nairobi Securities Exchange--listed companies.
Mr Kiereini had since defended himself, pleading innocence of the accusations of illegal transactions at the firm.
At the time of his resignation, he remained a director of Unga Limited and had quit the board of CFC Stanbic Holding and East Africa Breweries Limited. Mr Njonjo, who owned 1.32 per cent of CMC Holdings, refused to comment on his exit.
“Please ask the management of CMC of my retirement,” he told the Business Daily in a phone interview.
The boardroom wrangles were set off by the ouster of Mr Muthoka on September 8 as chair of CMC after he was accused of breaching corporate governance standards by being head of the auto firm’s boards and a CMC supplier through Andy Forwarders.
CMC’s management also accused him of over-billing them by up to Sh1.5 billion in a period of five years, prompting the Capital Markets Authority (CMA) to order a forensic audit into the company’s finances