The Capital Markets Authority (CMA) is locked in a fresh court battle over the KenolKobil insider trading case after the former head of one of Kenya’s biggest stockbrokers – who was banned over the breach – moved to overturn the punishment.
Andre DeSimone, who left his position as chief executive of Kestrel Capital in April last year after the insider trading allegations, has filed a suit with the Capital Markets Tribunal seeking to be cleared from the trading breach.
The CMA had established that Mr DeSimone had in October 2018 disclosed price-sensitive material relating to the impending takeover of KenolKobil by French multinational Rubis to two stockbroking agents, Aly-Khan Satchu and Kunal Bid, who were also punished for trading in the non-public information.
Mr DeSimone has now launched a legal fight against the CMA for banning him from holding a senior role in a listed firm or a brokerage for a year, arguing that the regulator had failed to establish that he profited from the leaked information.
He wants the tribunal to quash the ban, reverse the Sh2.5 million fine slapped on him for sharing the price sensitive information and offer him a just compensation on claims that evidence before the regulator does not meet the threshold for insider trading.
“The ad hoc committee erred in fact and in law in not finding that the appellant’s disclosure of information to his co-accused was given without regard to motivation, intent knowledge or expectations of gaining any material benefit,” says Mr DeSimone in court papers.
“The said decision of the ad hoc committee of the board of the Capital Markets Authority be set aside. The honourable Tribunal grants any other or further relief it deems fit or just.”
Mr DeSimone had admitted to the committee to having told Mr Satchu and Mr Bid of the Sh26 billion KenolKobil sale to Rubis, giving the two privileged information that they used to trade on the Nairobi Securities Exchange (NSE) listed stock days ahead of the transaction.
The duo then bought, advised their clients to buy or bought on their behalf about 59 million KenolKobil shares then worth about Sh1 billion in the week before the takeover information was made public
The markets regulator is this week expected to file its defense to the suit after it received Mr DeSimone’s petition on April 8.
While Mr DeSimone paid the Sh2.5 million fine and has weeks remaining to complete the one-year ban, he maintains that […]
