THE FULL STORY FROM ALLAFRICA.COMMBEA Brokerage Services clients will have to transact business with Crested Stocks Securities with immediate effect following the de-licensing of one of the industry's oldest players.
MBEA Brokerage Service has failed to meet the stock market's regulators licensing criteria for the coming year, forcing them to close shop until they resolve their issues.
In a notice published by the Capital Markets Authority yesterday, MBEA's licence was not renewed for the coming year "due to the inability of the entity to meet its minimum net capital requirements".
The minimum net capital requirements for a brokerage firm is sh15m.
CMA boss Japheth Kato said the firm's clients will be transferred to Crested Stocks Securities and that none of the clients' money will be affected by the move.
"We have not suspended them, they can come to us for renewal once they have sorted their capital issues," Kato told The New Vision.
He said the firm had not been involved in any impropriety, but had just fallen victim to the ups and downs of doing business.
Kato said the problem was not industrywide, adding that because of the greater number of brokerage firms in the market, the sector will not be badly affected even if MBEA is one of the bigger more established firms.
Apologising to his clients for the inevitable inconvenience, MBEA boss Andrew Owinyi, said: "Our difficulties were predicated on the global downturn of 2008 to 2009, but our shareholders are taking all the necessary steps to recapitalise the firm."
Owinyi said clients' funds have "not been compromised and our business has been transferred to correspondent brokers Crested Stocks, who will handle our business as we go through this recapitalisation business".
He was optimistic that his firm will be back on its feet in three month
The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .