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{
    "id": 974778,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/974778/?format=api",
    "text_counter": 275,
    "type": "speech",
    "speaker_name": "Baringo North, JP",
    "speaker_title": "Hon. William Cheptumo",
    "speaker": {
        "id": 50,
        "legal_name": "William Cheptumo Kipkiror",
        "slug": "william-kipkiror"
    },
    "content": "Committee. The Attorney-General indeed supported this particular proposal. Even though the requirements to obtain company seals in Kenya is optional, in practice companies still get seals made which take around two days to obtain. It goes for about Ksh2500 and sometimes Ksh3000. It is an element of cost when you want to have a seal for a company. The Attorney-General also admitted that with the digitisation of the process of incorporating companies in Kenya, the security features offered by the company seals have been rendered obsolete owing to more technologically advanced security features of the digital system currently in place. Therefore, we support this particular proposed amendment because we feel it is going to create a better environment for us to do business in our country. The amendment therefore, seeks to streamline post registration procedures by eliminating the need to obtain a company seal which in turn reduces the procedures, time, cost or paid up minimum capital requirement for starting business in Kenya. The other area I would like to briefly capture in my submissions is the proposed amendment to amend Section 611 of the Companies Act of 2015. This amendment seeks to raise the applicable threshold within which an offer or can have a right to buy out minority shares from 50 to 90 per cent. Currently, the law as it is, states that if you are a shareholder of a company with 50 per cent, you can actually buy out the minority shares of that company. However, this proposed amendment is to increase the threshold from 50 to 90 per cent. This is so that if you own 50 per cent shares of a company, it will be easy for you to convince the remaining 10 per cent shareholders who are the minority and you buy their shares. This is fair because if you are a 50 per cent shareholder of a company, and still want to buy the remaining shares, indeed it is unfair. I think this is going to help in ensuring that you must have a high stake in a company for you to indeed convince the minority shareholders to sell their shares to you. Minority shareholders should be protected from abusive actions which are taken in the interest of controlling shareholders acting either directly or indirectly. The 50 per cent threshold is detrimental to the market as a whole and companies may be vulnerable to stakeholders. That is another very important amendment and we support it. The various stakeholders who appeared before us also supported that particular proposal. Finally is another very interesting proposal which is also contained in this Bill. In Clause 32 of the Business Laws (Amendment Bill), the Attorney-General proposes insertion of a new Clause 32A on protection of minority investors. The insertion proposes to amend Section 289 of the Companies Act which seeks to ensure that minority shareholders are given a fair chance to be heard by being accorded the right to put in an item in the agenda. When we have general meetings with these companies, the minority shareholders are normally not given a chance to propose an agenda in those meetings. So, this proposed amendment is to give a chance to the minority shareholders also so that when they attend annual general meetings for their companies, they are also able to propose an agenda for discussion in that meeting. The proposed provision seeks to ensure that in the case of a quoted company, shareholders representing 5 per cent of the paid-up capital of their company are at liberty to propose an item in the agenda to be circulated to members of the company. This is really a way of protecting the minority shareholders of companies so that they are able to introduce agendas in that meeting so that they can protect their interests. As I conclude, currently the unemployment of the youth in our country is alarming. It is actually one of the greatest challenges we are facing as a country. Hon. Speaker, if we make the business environment in our country to be efficient, we are going to create opportunities for our young people because we will have more investors coming on board and the Kenyan investors The electronic version of the Official Hansard Report is for information purposes only. Acertified version of this Report can be obtained from the Hansard Editor."
}