MPs question CMA oversight of Quickmart's Sh15 billion share sale

The Capital Markets Authority (CMA) is facing pressure from lawmakers to strengthen oversight of public investment offers following concerns over Quickmart Supermarket's proposed Sh15 billion share sale.

Members of the National Assembly Public Investments Committee on Commercial Affairs and Energy questioned whether the regulator had adequately assessed the risks facing prospective investors.

They warned that weak scrutiny could expose Kenyans to significant financial losses.

The concerns emerged during a meeting between the committee and CMA officials led by Chief Executive Officer Wyckliffe Shamiah. The officials appeared before the committee to respond to audit queries covering the financial years 2018/2019 to 2024/2025.

Nairobi County MP Esther Passaris questioned whether ordinary Kenyans had received sufficient information about the proposed share offer.

She also raised concerns about the structure of the transaction. The offer involves the sale of two billion existing shares held by Sokoni Retail Kenya Limited at Sh7.50 each.

The proposed sale has attracted applications worth Sh18.41 billion, representing a 22.7 per cent oversubscription against the Sh15 billion target.

However, the proceeds will go to the selling shareholder rather than Quickmart Supermarket. This means the retailer will not receive fresh capital from the transaction to expand or strengthen its operations.

The sale has also been presented as a partial exit by private equity investor Adenia and the supermarket's founders.

Passaris questioned whether investors fully understood the potential risks, particularly given the collapse of major supermarket chains such as Uchumi and Nakumatt.

Committee chairman and Pokot South MP David Pkosing challenged CMA to take greater responsibility for protecting investors.

“As the market regulator, you have an obligation to protect Kenyans from potential loss of funds. You have the capacity to seal all these loopholes, and your biggest risk that needs your immediate attention appears to be these supermarket chains' share offers,” Pkosing said.

Lawmakers also questioned whether CMA had adequately examined Quickmart's financial position, cash flows, supplier obligations and disclosures before approving the transaction.

Responding to the concerns, Shamiah said the authority had conducted a thorough assessment of the proposed share sale.

He maintained that Quickmart met the required regulatory thresholds and was not heavily dependent on borrowed funds.

“The SME (Quickmart) is not heavily reliant on debt, as the bulk of its funding is internally generated. The proposed share sale has also met the other requisite thresholds,” Shamiah said.

His response came amid calls from MPs for stronger market surveillance and more rigorous scrutiny of investment offers, particularly those involving businesses operating in sectors with a history of major corporate failures.

Beyond the Quickmart transaction, lawmakers examined audit queries in CMA's financial statements for the seven financial years under review.

The issues included the engagement of temporary staff during the 2023/2024 financial year and alleged irregularities in the procurement of insurance brokerage services for medical cover in 2024/2025.

On the staffing matter, Shamiah told the committee that CMA had hired temporary personnel to address shortages.

He said the authority has since recruited employees to fill the affected positions permanently, with approval from the National Treasury.

CMA also defended its procurement of insurance brokerage services, maintaining that the process complied with the relevant legal requirements.

The committee's concerns have renewed focus on the regulator's role in ensuring public share offers are properly assessed and investors receive adequate information before committing their money.