4.16.5 In the event that the results of the subscription make theabove allocation policy impractical then an amendment to theallocation policy shall be made with the approval of the CMAand such amendment will be announced through a notice in atleast two daily newspapers with national circulation in Kenyawithin twenty four hours of the grant of such approval.4.16.6 In the event of any doubt whatsoever as to the allocationof the Offer Shares as determined by the <strong>NSE</strong>, the decision ofthe <strong>NSE</strong> will be final.4.16.7 The <strong>NSE</strong> will announce the manner in which the OfferShares have been allocated to applicants in the above twopools on the date detailed in No 3 of the Section 2-Timetableabove. The announcement will be published in at least twonewspapers with national circulation in Kenya.4.17 Loan Facilities4.17.1 Investors may approach a Lender for loan facilitiesto facilitate participation and payment of the full amountdue in respect of the Offer Shares.4.17.2 The extension of loan facilities by any Lender is adecision to be made by such Lender, at its sole andabsolute discretion.4.17.3 Investors who intend to acquire the Offer Sharesthrough loan facilities shall ensure that the following iscomplied with:4.17.3.1 the Lender shall write to the CDSC stating that itrequires the Offer Shares to be pledged as security, untilsuch time as the CDSC is instructed in writing to thecontrary by such Lender, through an Authorised Agent, tolift such pledge; and4.17.3.2 upon completion of CDS Form 5 (available froman Authorised Agent), all pledges will be effected throughentries in the Central Depository System maintained bythe CDSC. The pledging of such shares will, at all times, besubject to Rule 63 of the Central Depositories (Regulationof Central Depositories) Rules, 2004.For every financed application to the CDSC, the Lenderor the purchaser is required to pay Kshs 1,000/- via a Banker’sCheque or a cheque issued by an Authorised Agent,payable to “CDSC” - [insert serial no. of CDS Form 5].4.17.4 Lenders extending finance must submit payment for thefull amount due and attach the duly completed and executedApplication Form, together with a letter signed by theauthorized representatives of the Lender addressed to theRegistrar, requesting the shares to be frozen in the CDS, toreach the Authorised Agent by the Closure Date.4.18 Refunds4.18.1 Refunds will be paid by EFT or RTGS to the bank accountdetails in the CDS Account or in the Application Form. However,if the electronic transfer is declared unsuccessful or otherwise,a Banker’s Cheque or bank draft may be issued in the nameappearing on the Application Form.4.18.2 Where a Lender has advanced money to an investor tosubscribe for Offer Shares, refunds will be made to or for theaccount of such a Lender as the case may be.4.18.3 The <strong>NSE</strong> will make refunds on the Refund Date and willcomply with Capital Markets Legislation.4.18.4 Refund cheques (where applicable) should becollected from the relevant Authorised Agent against proofof identity and other documentation to the satisfaction ofthe Authorised Agent.4.18.5 Payment of refunds to foreign/nonresident investors,shall be made having regard to the prevailing exchange ratesand any fluctuations shall be for the investor’s account.4.18.6 Neither the <strong>NSE</strong>, the Receiving Agent, the ReceivingBank nor any transaction advisors to this Offer will beresponsible or liable for any refund not received or notreceived in time, once the refund has been made by <strong>NSE</strong>using the data in the CDS Account or the Application Form,as provided by the account holder.Where refunds are sent to the incorrect bank account orwhere cheques are cleared incorrectly, by the ReceivingBank on behalf of <strong>NSE</strong>, <strong>NSE</strong> will take responsibility and havethe transfer or cheque rectified as required, provided thereis a formal notification by investors for refunds not received,The investor is required to write a letter to their AuthorisedAgent who within 5 business days of receipt will be requiredto investigate and revert back to the investor with therelevant information. Any rectification is expected to bemade within a further 5 business days.The Receiving Bank and Receiving Agent are expected to putin measures to ensure safe custody of cheques and properverification procedures for clearance of cheques. Theseinclude effective co-ordination of information flow betweenthem and the Authorised Agents, the use of specialdocumentation, hierarchical administrative structures anddedicated personnel with specific responsibilities.4.19 Trading4.19.1 Investors who comply with the procedures foracceptance as set out in this <strong>Prospectus</strong>, will receive their fullypaid Offer Shares in electronic form, by way of credit to theirrespective CDS Accounts. It is the responsibility of the investorsto ensure that their CDS Account details set out in theApplication Form are correct.4.19.2 Trading in fully paid Offer Shares may only take placethrough a CDS Account.4.19.3 Fully paid Offer Shares will be admitted on the MainInvestment Market Segment of the Exchange on the Self-Listing Date with dealings of fully paid Offer Sharescommencing at 10:00 a.m. on the same date.4.19.4 Foreign investors: The Capital Markets (ForeignInvestors) Regulations, 2002 (“the Foreign InvestorsRegulations”) define a ‘foreign investor’ in Regulation 2 ofthe Foreign Investors Regulations as being any person who isnot a citizen of an East African Community Partner State ora body corporate established or incorporated in an EastAfrican Community Partner State and whose beneficialinterest in 100% of its ordinary shares is for the time beingheld by a citizen or government of an East African CommunityPartner State or incorporated under the provisions of the lawsof an East African Community Partner State.26
Regulation 3 (1) of the Foreign Investors Regulations provides that:“Every issuer shall reserve at least twenty-five per centum of itsordinary shares for investment by local investors in the issuer”.The shares to be reserved should be the percentage of theordinary shares to be listed on the securities exchange.Regulation 3(3) the Foreign Investors Regulations goes on toprovide that: “Any proportion of the voting shares of an issuerin excess of twenty - five per centum reserved for local investors,shall be available for investment by [among others] foreigninvestors without restrictions except as provided under theCapital Markets (Take-Overs and Mergers) Regulations 2002”.4.20 Distribution RestrictionsThis <strong>Prospectus</strong> and accompanying Application Form do not, andare not intended to, constitute an offer for the Offer Shares in anyplace outside Kenya or in any circumstances where such offer orsolicitation is not authorised or is unlawful. In that regard, this<strong>Prospectus</strong> and accompanying Application Form may not be usedfor or in connection with any offer to, or solicitation by, anyonein any jurisdiction or in any circumstances where such offer orsolicitation is not authorized, or is unlawful. The distribution of this<strong>Prospectus</strong> and accompanying Application Form outside of Kenyamay be restricted by law and persons who come into possession ofthis <strong>Prospectus</strong> and accompanying Application Form should seekadvice on and observe those restrictions.This sub-section does not purport to be a complete analysis of oradvice whatsoever concerning tax considerations relating to thetrading of the <strong>NSE</strong> Shares and so should be treated with appropriatecaution. Investors should consult their own professional advisorsconcerning the possible tax consequences of purchasing, holdingand/or selling the Offer Shares and receiving payments of dividendand/or other amounts in respect of the Offer Shares under theapplicable laws of their country of citizenship, residence ordomicile.4.23 Governing LawThis <strong>Prospectus</strong> and any contract resulting from the acceptance ofan order to trade in the shares of the <strong>NSE</strong> as a consequence of theOffer shall be governed by and construed in accordance with theLaws of Kenya.Any failure to comply with those restrictions may constitute aviolation of applicable securities laws. Any such recipient mustnot treat this <strong>Prospectus</strong> and accompanying Application Form asconstituting an offer to him, unless it is received in the relevantjurisdiction, where such invitation or offer could be made lawfullyto him/her without contravention of any registration or legalrequirements. Without limitation, neither this <strong>Prospectus</strong> northe accompanying Application Form may be sent or otherwisedistributed outside Kenya.Persons into whose possession this <strong>Prospectus</strong> may come arerequired by the <strong>NSE</strong> to inform themselves about and to observesuch restrictions.4.21 Investment RestrictionsThe Offer to foreign investors may be affected by laws andregulatory requirements of the relevant jurisdictions. Any foreigninvestors wishing to trade in the Offer Shares must satisfythemselves as to the full observance of the laws of the relevantterritory and governmental and other consents to ensure that allrequisite formalities are adhered to and pay any issue, transfer ortaxes due in such territory.Foreign investors are advised to consult their own professionaladvisors as to whether they require any governmental or otherconsent or need to observe any applicable legal or regulatoryrequirements to enable them to trade in the Offer Shares.4.22 TaxationThe comments below are of a general nature based on taxationlaw and practice in Kenya as at the date of this <strong>Prospectus</strong> and aresubject to any changes thereafter.Withholding tax at the prevailing rate will be deducted from dividendpayments made to all shareholders of the <strong>NSE</strong>. Non-residents maybe entitled to a tax credit in their country of residence, either underdomestic law or under country to country tax treaties. Kenya hasentered into some double taxation treaties while some have beensigned but are not yet in force. If any investor is tax exempt, acertified copy of the Tax Exemption Certificate will be required.27