Capital Markets Authority(CMA) has said an appeal against its sanctions on Mr Andre De Simone, former CEO of Kestrel Capital, found guilty of involvement in insider trading, should be dismissed.
This is because the application, lodged at the CMA tribunal on 21st February, 2020, is time-barred, coming in 9 months after the case had been heard and determined.
In a sworn affidavit lodged before the CMA Tribunal in Nairobi by Abubakar Hassan Abubakar, CMA Acting Director in Charge of Market Operations, dated 19th May, 2020, the regulator argues that while the applicant alleges that he was on leave in the United States when CMA issued its sanctions and fine, he had the option of sending his lawyer(s).
In the matter of CMA versus Andre De Simon where the applicant was fined KSh 2.5 Million, CMA has said an appeal against this decision was filed 9 months this decision was made. An appeal by the applicant is dated 16th January, 2020 and was filed before the CMA tribunal on 21st February 2020 and served on CMA on 8th April, 2020.
In October 2018, CMA commenced investigations into suspected insider involving the takeover of Kenol Kobil by Robis Energie S.A.S. The investigations focused on the period prior to the announcement by Rubis of their intention to takeover Kenol Kobil on October 24th, 2018.
Between February and October, 2018, the applicant who was the CEO of Kestrel Capital (East Africa) Limited, CMA says in the affidavit, was involved in negotiations and information surrounding the intended takeover of Kenol Kobil by Rubis, including the timing of the intended announcement.
De Simone is said to have attended meetings in June and September 2018 with representatives of Rubis Energies SAS and other parties in Kenya and Paris, France where details concerning the impending takeover were discussed and firmed up.
The applicant was aware that Wells Petroleum would sell its 24.99% stake in Kenol Kobil to Rubis and that Rubis had intention to make a takeover bid of the remaining shareholding in Kenol Kobil at a price of KSh 23.00 per share.
The applicant then informed Mr Aly Khan Satchu and Mr Kunal Bid, his stockbroking agents, who subsequently traded over 59,890,100 Million Kenol Kobil shares with the intention of securing illegal gains amounting to KSh 481,200,300. Upon establishing these facts, CMA issued a motion to the applicant requiring him to show cause why enforcement action should not take enforcement action against him for engaging in insider trading.
The applicant responded on 26th March, 2019 by admitting having shared information concerning the Kenol Kobi takeover with Mr Aly Khan Satchu, then a stockbroking agent of Kestrel. He also admitted attending meetings where the takeover bid was discussed with Mr Kunal Bid, also a broker for Kestrel.
On the 10th June, 2019, De Simone was invited to make submissions before the CMA Ad Hoc Committee where he also admitted sharing information concerning the Kenol Kobil takeover bid.
The Committee found him culpable of insider trading contrary to provisions of Section 32B (1)(b) of the CMA Act and imposed sanctions upon the applicant. This decision was made on 5th July 2019 after hearings which concluded on 10th June, 2019.
De Simon has thus lodged an appeal against this decision, 9 months after CMA took actions against him. CMA also took enforcement action against Sachu and Bid, two other individuals found to have been involved in insider dealing.
The regulator, through Mr Abubakar Hassan Abubakar, has opposed the applicant’s appeal as lacking merit, incompetent, unfounded, abuse of the court process and an afterthought.