NAIROBI, KENYA: The Capital Markets Authority (CMA) has cracked whip on three individuals found guilty of insider trading on Kenol Kobil shares.
In a statement, the authority said two of the individuals (Andre DeSimone, and Aly Khan Satchu) will temporarily be blocked from holding office as key officers of public listed companies while Sh23.4 million earned by trading accounts managed under discretion by Kunal Bid recovered.
The Capital Markets Authority Committee found out that Andre DeSimone disclosed sensitive material on the KenolKobil transaction on the sale of the 24.99 per cent to Rubis Energie SAS (Rubis). He also disclosed the information to Aly Khan Satchu and Kunal Bid.
“The two stockbroking agents thereafter used the insider information to deal in the price affected shares by advising and or buying on behalf of their clients approximately 59 million KenolKobil shares in the week before the takeover announcement,” said in a CMA statement.
The Committee has imposed on DeSimone a financial penalty of Sh2.5 million and has further disqualified him from holding office as a key officer of a public listed company for a period of one year
The committee disgorged Sh4.7 million being the amount received by Satchu as commissions from respective trades conducted based on insider information.
The committee further disqualified Satchu from holding office as a key officer of the public listed company for a period of three years.
“The committee has disgorged Sh23,413,700 being gains by the trading accounts managed under discretion by Kunal Bid, which were noted to have purchase of 2,895,100 shares through Kestrel Capital and AIB Capital,” reads the CMA statement.
On March 29, the board of Kestrel Capital called a crisis meeting after its chairman Charles Field Marsham and CEO Andre DeSimone were sucked into the tempest of insider trading of 56 million KenolKobil shares.
The deals were estimated to be worth a staggering Sh853 million.
The board wanted the truth, at least under the circumstances given the firm was receiving bad press and its reputation was at stake. The CEO had to admit he was the source of ‘actionable intelligence’ leaked to Aly Khan Satchu, the CEO Rich Management, and the board subsequently forced him out.
“DeSimone admitted that he disclosed price sensitive non-public information on KenolKobil take over information to Mr Aly Khan Satchu, who subsequently dealt in the securities that were price-affected,” investigators said.
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