Amana Capital Clients Will Not Be Allowed To Withdraw Their Money

Amana clients will not be redeeming their money to give the investment firm time to find solutions in the wake of its liquidity challenges, The Capital Markets Authority (CMA) has said while placing a 28-day freeze on the withdrawal of funds from Amana Capital.

“The Capital Markets Authority (CMA) has given a no-objection to a 28-day moratorium to enable the fund manager, Amana Capital Limited (ACL), work with its Trustee, NatBank Trustee & Investment Services Limited, to improve its liquidity position to meet redemption obligations to unit holders with investments in the Amana Shilling Fund,” CMA satated in a statement.

CMA says the move will give ACL time to realise strategies to improve its liquidity position to meet redemption obligations to unitholders with investments in the Amana Shilling Fund.

This will only add inconvenience to clients who have not been able to recall their capital at Amana’s shilling fund as it has remained frozen for the last two years.

Amana Capital had injected Sh275 million in commercial paper, up to 20 pc of its assets in Nakumatt Holdings.

Nakumatt defaulted on the short-term loans among other classes of creditors, sparking major write-offs among banks, suppliers, insurance firms and high-net-worth individuals.

CMA’s move comes just days after it ordered money market funds to provide details of how and where they were investing clients’ cash as well as the terms of the deals after it came to light that some investments were gambling and losing investors billions of shillings.

“We have issued circulars clarifying when they do their quarterly fillings to disclose which investments in classes, for example you do not just make a return saying; Cash, Sh1 billion, we want you to be very specific, what is in deposits, what is in cash. As we review we also ask you to explain more on the terms of those assets as you disclose them,” CMA acting chief executive Wycliffe Shamiah said.