Former Kestrel Capital CEO Andre DeSimone has moved to the Capital Markets Tribunal to sue the Capital Markets Authority (CMA) for implicating him in the KenolKobil insider trading scandal.
DeSimone was accused of leaking price-sensitive material relating to the takeover of KenolKobil by Rubis Energie to Aly-Khan Satchu and Kunal Bid, both stockbroking agents.
Desimone resigned in April last year, bringing to a halt his 24-year reign in the company after he was mentioned in the scandal.
In the allegations, Desimone, Aly-Khan Satchu and Bid allegedly positioned five investors to gain 53.6 percent of their investment in the buyout, amounting to Ksh455.9 million. The five include Abdul Sheik, Nureen Moledina, Farzeen Jamal, Adrian Tiwari and Anad Radia.
Consequently, Mr DeSimone was banned from holding a senior role in a listed firm or a brokerage for a year, and also fined Ksh2.5 million.
However, in his suit, Mr DeSimone argues that CMA failed to establish that he profited from the leaked information, hence his name should be cleared and the fine reversed.
“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.”
He further says thet the one year could turn into a lifetime ban, since he has not worked in any other industry all his life.
“While CMA may have viewed the one year regulatory ban as lenient, for a person working as a professional advisor in the financial service industry, being found culpable of insider trading is tantamount to a lifelong ban. I can never practically work again in the financial service industry, an industry which I worked since my career started in 1989. I have no other means or skills to support my family,” he says.
His co-accused Aly-Khan Satchu was banned from trading or holding any significant office in any listed firms at the Nairobi Stock Exchange for three years.