Critical Review of the Legal Framework for Financial Bailouts of Public Companies in Kenya

Abstract

Bailouts of public companies or SOEs are a common phenomenon the world over. However, it is not until the great melt down of 2008 in the USA that set down the momentum of interrogating bailouts and corporate financial crisis, their effects and justifications. USA which experienced the 2008 melt down come up with various legislation that deal with bailouts. China, has also in the recent times come up with guiding opinions which are geared towards dealing with the issue of bailouts amongst other issues relating to SOEs. This thesis paper reviews the financial legal framework in Kenya in relation to bailouts and more specifically, to find out whether there is a legal framework guiding financial bailouts of public companies in Kenya. The methodology used in the research is qualitative methodology and the technique used is the target respondent interviews. The data was collected through questionnaires. The results seek to show that there is no legal framework for financial bailouts of public companies in Kenya. It also shows that bailouts are important in safeguarding and protecting jobs of the taxpayers who are not responsible for the financial failures of public companies that find themselves in financial distress or crisis.