High Court Judge Pauline Nyamweya has suspended the Sh5 million fine imposed on former National Bank CEO Munir Ahmed on 3 April this year. The Capital Markets Authority (CMA) gave the enforcement action against the ex-CEO for allegedly participating in fraud and overstating profits in the second and third quarters of 2015.
“There is need to preserve the status quo until the legality of [CMA’s] proceedings and the decision is established,” Nyamweya ruled.
With regards to Munir’s disqualification from holding any position in a publicly listed company, the Judge said Munir needs to establish the reasons that have led him to challenge CMA’s decision to disqualify him.
Munir applied for an order of stay in court to have the enforcement action imposed on him halted. So far, the ex-chief executive has not paid the aforementioned financial penalty. To this end, the Judge granted Munir a stay only “to the extent of the leave granted to commence judicial review proceedings shall operate as a stay of the payment and/or recovery of the financial penalty of Sh5 million.” However, “the leave shall not operate as a stay of the disqualification.”
Nyamweya explained a stay as follows in her determination: “The purpose of a stay is to preserve the status quo pending the final determination of the claim for judicial review.”
The Judge also gave a similar ruling to the former head of treasury at NBK, Solomon Alubala who was among the senior officers implicated in the bank’s fraud scandal.
“The prayer for stay in the applicant’s chamber summons dated June 20, 2018, is allowed only to the extent of the leave granted to commence judicial review proceedings shall operate as a stay of the payment and/or recovery of the financial penalty of Sh104,800,000,” Nyamweya ruled.
Alubala was also disqualified from holding any office in a publicly listed company for ten years. On this matter, the judge ruled: “The leave shall not operate as a stay of the disqualification.”
