The Capital Market Authority (CMA) is facing legal action from a shareholder, Mihr Samir Thakar, who has filed a petition challenging the recent decision to extend the suspension of trading in Kenya Airways (KQ) shares at the Nairobi Securities Exchange (NSE) for an additional 12 months.

Thakar, who holds 71,075 shares in the national carrier, deems the year-long extension, effective January 5, 2024, as unreasonable and unjustified.

In his appeal papers at the Capital Market Authority Tribunal, he asserts, "l seek this appeal be allowed, and the decision of the Capital Markets Authority be set aside with costs."

The suspension of KQ’s shares has left more than 77,000 small investors unable to liquidate their portfolios.

Thakar contends that CMA erred in law by not soliciting the views of the public, particularly shareholders, and failed to provide reasons for the extension in violation of fair practices.

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"The Capital Market Authority erred in law and in fact by being biased against minority investors holding shares at Kenya Airways," claims Thakar in his appeal.

He further accuses CMA of abusing its discretionary power meant to protect shareholders and the public interest.

The petitioner alleges that CMA's decision was made with an ulterior motive, calculating to prejudice the legal rights of minority investors.

Thakar emphasizes that the authority failed to consider the interests of shareholders and violated the principles of transparency and accountability.

CMA, in a statement released earlier this month, justified the extension, stating that it aims to enable Kenya Airways to complete its operational and corporate restructuring process.

The airline's shares were initially suspended in July 2020 when the government proposed privatizing the loss-making carrier.

The second extension occurred on September 4, 2020, as the NSE claimed the company had not finalized its operational and corporate restructuring for the government buy-out.

Kenya's government owns 48.9 per cent, and Air France-KLM holds 7.8 per cent, while private owners and banks possess the remainder.

Investors, now caught in the crossfire of regulatory decisions and corporate restructuring, eagerly await the resolution of Thakar's legal challenge as the fate of Kenya Airways' shares hangs in the balance.