Deacons Plc Suspended at the NSE as it Goes Under Administration

Investors, shareholders, and the public will not be able to trade in the shares of Deacons East Africa Plc at the Nairobi Securities Exchange (NSE) following the company’s suspension by the Capital Markets Authority (CMA) amid receivership woes.

The suspension, which followed the appointment of joint administrators to run the company, took effect on November 19 and will hold for 40 working days.

“Notice is hereby given on the suspension in trading of Deacons (East Africa) Plc shares following the appointment of joint administrators by the Board of the company to run its business in accordance with the Insolvency Act of No 18 of 2015,” read the CMA note.

The authority issued the suspension in pursuant to Regulation 22(2) of the Capital Markets (Securities) (Public Offers, Listings and Disclosures) Regulations, 2002.

The company’s financial report for the period ended June 30, 2018, showed that the fashion retailer registered a loss after-tax of 229.5 million shillings for the six months.

CMA has urged those trading in the shares to take note of the suspension.

Meanwhile, Peter Kahi and Atul Shah of PKF Consulting have been chosen by the company’s board as joint administrators who will run the firm’s operations.

According to Muchiri Wahome, the chief executive of Deacons East Africa, the placing of the company under administration by the directors is for a good cause and the best interests of the creditors.

“It is in the best interest of the company and its creditors for the directors to place the company into administration,” he said in a statement.

The suspension of Deacons Plc comes barely three months after ARM Cement was suspended only a few days after it had been placed under administration. According to the authority, up to 8 firms listed on the NSE face liquidity and various corporate leadership issues that have seen their earnings decline.

Experts claim the investor’s wealth is at risk as the shares of these firms have significantly dropped and their short-term assets cannot cover the short-term liabilities, a reason why they face challenges financing their daily operations.