NSE CEO quits

Anxiety engulfed Nairobi Stock Exchange after its chief executive Chris Mwebesa, resigned under unclear circumstances.

The news of his resignation comes barely four months after his contract was renewed to run until 2011.

Information available to the Daily Nation indicates that the chief executive office “resigned a few weeks ago” but the NSE board of directors decided to hold the matter from the public as it tried to dissuade him from leaving.

That collapsed last week with efforts to look for his replacement kicking off in earnest.

The board decision to stay silent was to remain but was broken when “a source within the board leaked the information to the press”.

It is understood that the effort to persuade Mr Mwebesa to stay hit a snag last week.

His resignation comes as a big blow to the recently elected NSE chairman James Wangunyu who said he had confidence in the CEO by renewing his employment contract days after assuming the chair in July.

At the time of the renewal, Mr Mwebesa was working on a temporary visa with his contract having expired in November 2007.

The then NSE chairman Jimnah Mbaru delayed his renewal, only appointing a board led by Mr Edward Njoroge, the KenGen boss, to negotiate new terms with the chief executive.

On its first seating, the new board under Mr Wangunyu confirmed Mr Mwebesa’s position as the CEO.

Talking earlier to the Daily Nation, Mr Wangunyu had said of his choice: “Mr Mwebesa is very focused. It is only that we (NSE directors) have not empowered him. Once we do, we believe he will deliver our vision.”

Mr Mwebesa was first appointed the bourse’s CEO in 2005 and has presided over the NSE’s highest growth period in its 53-year history, making it currently the biggest stock exchange in the region and the 5th largest in Africa in terms of market capitalisation.

The former head of business development at AIG Global Investment Company and CEO of Stanbic Investment Management Services has overseen five initial public offerings, including that of mobile phone company Safaricom which is said to be the largest to date in sub-Saharan Africa.

Other achievements include the installation of the Automated Trading System, Wide Area Network, and introduction of the NSE All Share Index (NASI).

Critics have, however, pointed to the bourse’s failure to attract more new listings, with the total number of listed companies still at 55, giving an average of about one listing per annum since it was founded in 1954.

It was also during Mr Mwebesa’s tenure that one stockbroker, Francis Thuo & Partners went under with an estimated Sh140 million of investors’ funds, while Nyaga Stockbrokers, believed to have been the biggest retail stockbroker prior to its liquidity problems, currently under statutory management.