The NSE has suspended a Sh4.8 billion corporate bond issued by Chase Bank, which was placed under receivership over liquidity problems.
The Nairobi Securities Exchange suspended the trading of the bond following a directive from the Capital Markets Authority, which took effect last Friday.
“Notice is hereby given on the suspension of trading of the Chase Bank Fixed Rate Notes listed on the Fixed Income Securities Market Segment of the NSE," read a statement on Wednesday.
NSE explained that the bank's placement under the Kenya Deposit Insurance Corporation prohibited payment of any claims by its creditors.
Chase Bank is the second one to run into trouble at the NSE after Imperial Bank , which collapsed before it could list its bond issued to investors.
Panic over Chase Bank's financial state amid rumours of instability caused depositors to quickly withdraw their cash last week.
Reports indicated the Central Bank contacted the bank's management several times on Wednesday, with the hope that shareholders would pump in money.
Customers could not make withdrawals last Thursday morning after the 12-month receivership was officially announced.
Governor Patrick Njoroge said the bank was unable to meet its financial obligations
Chase Bank group MD Duncan Kabui and chairman Zafrullah Khan had resigned amid growing public concerns over the health of the bank .
