Kenya’s Capital Markets Authority this week took part in the annual World Investor Week 2018 and as part of its strategy to educate the public on the rights of shareholders which include; the right to share in the company’s profitability, income and assets, a degree of control and influence over company management selection, pre-emptive rights to newly issued shares and general meeting voting rights.
In a new consumer literacy program, the regulator says investors and shareholders have a right to Share in Profitability; as partial owners of the company.
The authority says, ’’division of profits is based on the number of shares owned by a shareholder, and gains can be substantial to shareholders over time. In addition to a share in profits generated by the company, shareholders also have rights to income distributions through dividend payments. If a company’s board of directors declares a dividend in a certain period, common shareholders are in line to receive it.’’
Adding that dividends are not guaranteed, however, if the company is liquidated, common shareholders have the right to assets and income of the company after bondholders and preferred shareholders are paid.
CMA also says shareholders should know they have the right to Influence Management, the right to Buy New Shares; Common shareholders also have pre-emptive rights, right to Vote; arguably, the greatest right for common shareholders is the ability to cast votes in a company’s annual or general meeting as well as the right to Sue for Wrongful Acts; Common shareholders who feel their rights have been violated also have the right to sue the issuing company.