![[Kenya] CMA recovers $4.5 million in connection to suspicious trades in KenolKobil shares](Images/2018/08/CMA.jpg)
[Kenya] CMA recovers $4.5 million in connection to suspicious trades in KenolKobil shares
The Capital Markets Authority (CMA) has secured the surrender of potentially illegal gains amounting to Ksh458 million, approximately $4.5 million, in the context of the ongoing investigations into insider trading on KenolKobil shares.
The funds surrendered to date relate to 90 percent of the quantum of suspicious trades identified through a total of 14 accounts that were frozen in October 2018 to facilitate investigations.
The recovered funds will be paid into the Investor Compensation Fund.
The investigations thus far have established that a number of investors had been advised and encouraged to trade based on what may constitute material price sensitive non-public information resulting in trades in Kenol Kobil shares before the October 24 2018 announcement by Rubis Energie of their intention to take over 100 percent ordinary share capital of Kenol Kobil Plc at a premium.
The investigations relating to the balance of the accounts flagged in connection with suspicious trading activities are ongoing.
Insider trading is an offence where a person in possession of privileged information which is material, price sensitive and non-public information either trades in securities relying on the information, discloses the same to another person who trades based on the information or encourages someone else to trade relying on the same information for gain or to avoid a loss.
Upon review of the investigation findings and recommendations, the CMA Board has resolved to initiate enforcement proceedings against the Kestrel Capital Executive Director, Mr. Andre DeSimone, Kestrel Capital Chairman & Founder, Mr. Charles Field-Marsham, and their stockbroking agent, Mr. Aly Khan Satchu, through issuing Notices to Show Cause.
The recipients of the Notices to Show Cause have been granted an opportunity to formally respond to allegations made against them and to appear before the CMA Board to make any submissions before a determination is made.
The investigation findings did not establish evidence of potential misconduct with regard to the KenolKobil Chief Executive, Mr David Ohana. No enforcement proceedings will therefore be initiated against him.
