CIC Insurance chief executive Nelson Kuria has made his first share sale since bringing the firm to the Nairobi bourse in July 2012.
Filings with the Capital Markets Authority show that Mr Kuria sold one million shares currently worth Sh4.6 million between March and May.
Mr Kuria said that the cash-in on the stock does not represent a loss of confidence in CIC Insurance, adding that the sale was informed by a reorganisation of his investments.
“It was a normal transaction. I was making changes to my portfolio,” Mr Kuria said.
His remaining shares in CIC are now valued at Sh53.3 million based on the current share price of Sh4.6.
The sale happened in a period when CIC’s share had rallied to above Sh5, representing significant capital gains compared to the listing price of Sh3.5.
The share has since declined 18.4 per cent over the past six months to trade at Sh4.6, marking the largest decline among insurance firms listed at the Nairobi Securities Exchange (NSE).
Mr Kuria is the first to sell his shares among CIC directors and major shareholders who committed not to offload 35 per cent of their shareholding for two years after listing. The lock-in period is aimed demonstrating confidence in the company’s future prospects.
Mr Kuria, who currently owns 0.53 per cent of CIC, committed to maintain at least 0.2 per cent ownership in the insurer until August next year.
CIC’s major owner, the Co-operative Insurance Society (CIS) Ltd, undertook not to sell any of its 1.6 billion shares for five years, signing to a longer lock-in period.
“CIS with a shareholding of 75 per cent is committed to the long term viability of the company and undertakes not to off load any of its shareholding in the company for the next five years after the listing,” CIC said in a pre-listing disclosure.
CIC made a net profit of Sh1.3 billion in the year ended December compared to Sh584 million the year before.
Mr Kuria joins other CEOs of listed companies who have earned millions of shillings from trading shares in companies they lead. They include James Mwangi of Equity Bank and Scangroup chief Bharat Thakrar.
This story first appeared in the Businessdailyafrica.com