Treasury secretary Henry Rotich has bowed to pressure from the private sector to revoke a law requiring foreign companies setting up shop in Kenya to cede a third of their shareholding to locals. Mr Rotich has changed a provision in the Companies Act that compelled all foreign companies registering in Kenya to reserve at least 30 per cent of their shareholding to Kenyans. “Section 975 of the Companies Act is amended in subsection (2 by deleting paragraph (b),” reads Section 85 of the Finance Act (2016). The repeal of the local ownership rule comes as a great relief to foreign investors who faced a fine of Sh5 million for non-compliance. Analysts had expressed fears that Kenya’s local ownership rule would spur the activities of government wheeler dealers and corrupt power brokers to acquire stakes in foreign firms coming to Nairobi using taxpayers’ cash.

Source: Daily Nation September 29, 2016 06:22 UTC