{"id":2609,"date":"2018-08-31T06:57:10","date_gmt":"2018-08-31T06:57:10","guid":{"rendered":"https:\/\/candrgroup.co.ke\/?p=2609"},"modified":"2024-02-08T20:41:57","modified_gmt":"2024-02-08T20:41:57","slug":"arm-cement-how-the-insolvency-act-protects-the-shareholder","status":"publish","type":"post","link":"https:\/\/candrgroup.co.ke\/2018\/08\/31\/arm-cement-how-the-insolvency-act-protects-the-shareholder\/","title":{"rendered":"ARM CEMENT: How the Insolvency Act Protects the Shareholder"},"content":{"rendered":"\n
ARM CEMENT: HOW THE INSOLVENCY ACT PROTECTS THE SHAREHOLDER<\/u><\/strong><\/p>\n\n\n\n Recently, news broke regarding a long-time player at the Nairobi Securities Exchange (NSE). It was reported that Athi River Mining Cement (ARM) had been placed under administration with Pricewaterhouse Coopers (PwC) given the mandate to be administrators. In a public announcement made on 20th<\/sup> August 2018, the bourse announced that trading of the ARM shares had been suspended for a period of 7 days. Social media was awash with commentary on what this meant for the cement industry and the state of the Kenyan capital market.<\/p>\n\n\n\n What was however understated is the crucial role that the Insolvency Act played in ensuring that instead of ARM Cement getting liquidated, it was placed under administration to give it a fighting chance. Enacted in 2015, this crucial piece of legislation allows companies to get their act together during times of financial turmoil. Previously, companies would be liquidated. Now they can continue operating while under administration. In regard to section 558 (1), when a company is put under administration and during the administration:<\/p>\n\n\n\n a) An application for the liquidation of the company may not be made<\/p>\n\n\n\n b) Any application for the liquidation of the company that is then pending is suspended<\/p>\n\n\n\n According to section 520 of the Insolvency Act, an Administrator is defined as, \u201cA person appointed under this Part to manage the company\u2019s affairs and property, and, if the context requires, includes a former administrator\u201d<\/p>\n\n\n\n