Lady Justice Cecilia Githua on Monday certified as urgent an application lodged by his lawyer, Njoroge Regeru, after it emerged that the Capital Markets Authority (CMA) had purported to revoke Kiereini's directorship in CFC Stanbic and CFC Insurance Holdings.
The judge directed Mr Kiereini to serve the regulator and Attorney- General Githu Muigai with the hearing notice and various pleading and documents. They are expected to appear before her on September 5 to argue out the application.
Mr Kiereini wants the court to issue conservatory orders stating the enforcement of the CMA’s board report on the financial irregularities at CMC and resolutions of August 3, which barred him from being appointed as a director of any listed company.
Mr Kiereini claims in his suit that CMA has reprimanded him for signing the accounts for the year ended September 30, 2009 and 2010 allegedly not prepared in compliance with International Financial Reporting Standards and for non-disclosure in the annual report on the extent of CMC compliance with the guidelines on corporate governance.
Mr Kiereini argues that he has a right to associate with persons and institutions of his choice and be elected to boards of directors of companies unless there is a legally justifiable ground militating against the same but “which does not exist in this case.”
Director of Public Prosecutions Keriako Tobiko has said his office is investigating the alleged fraudulent transactions with a view to preferring criminal charges against the suspects.
Influential businessman and former head of the Civil Service Jeremiah Kiereini has moved to court seeking orders to overturn a ban imposed on him by the capital markets regulator barring him from holding directorships in companies listed on the Nairobi Securities Exchange (NSE).
Lady Justice Cecilia Githua on Monday certified as urgent an application lodged by his lawyer, Njoroge Regeru, after it emerged that the Capital Markets Authority (CMA) had purported to revoke his directorship in CFC Stanbic and CFC Insurance Holdings.
CMA’s action comes after investigations implicated Mr Kiereini in a scheme that was used to stash money belonging to listed motor dealer, CMC Holdings, in offshore accounts.
“Enforcement of any of the findings by CMA regarding my sitting in any board of a listed company would be highly prejudicial and would amount to gross and unjustified violation of my inalienable constitutional rights,” Mr Kiereini told Justice Githua.
The judge directed Mr Kiereini to serve the regulator and Attorney- General Githu Muigai with the hearing notice and various pleading and documents. They are expected to appear before her on September 5 to argue out the application.
Mr Kiereini wants the court to issue conservatory orders stating the enforcement of the CMA’s board report on the financial irregularities at CMC and resolutions of August 3, which barred him from being appointed as a director of any listed company.
The businessman argues that CMA has pre-judged and pre-empted the findings of further investigations and had resolved that once the quantum in the off-shore arrangements has been established, recovery be initiated against him for an amount equivalent to two times the money he is alleged to have accrued.
CMA said it had invoked clauses in the law that allow for restitution of the company’s funds that were found to have been hidden in foreign accounts plus interest, estimated at between double or triple the original amounts.
Mr Kiereini claims in his suit that CMA has reprimanded him for signing the accounts for the year ended September 30, 2009 and 2010 allegedly not prepared in compliance with International Financial Reporting Standards and for non-disclosure in the annual report on the extent of CMC compliance with the guidelines on corporate governance.
The former long-serving head of Civil Service says in court papers that he is reasonably apprehensive that the markets regulator would move with haste and disqualify him from appointment as a director of any listed company.
Mr Kiereini added that the regulator was in the process of enforcing recovery and restitution against him “even before the investigations into the off-shore accounts have been undertaken and completed.”
He argues that he has a right to associate with persons and institutions of his choice and be elected to boards of directors of companies unless there is a legally justifiable ground militating against the same but “which does not exist in this case.”
Mr Kiereini further submitted that he would resist any attempt made to enforce any recovery, compensation or restitution against him before full investigation is conducted and concluded.
“The CMA report raises substantial issues of constitutionalism and administrative law and in particular the scope of its authority over the interests and rights of directors and shareholders in listed companies in Kenya,” says Mr Kiereini.
Mr Kiereini and two former directors of troubled motor dealer CMC are blamed for loss of millions of shillings diverted to secret off-shore accounts.
Director of Public Prosecutions Keriako Tobiko has said his office is investigating the alleged fraudulent transactions with a view to preferring criminal charges against the suspects.
“My office has been in regular contact with CMA in its assessment of the culpability of CMC board members adversely mentioned in a forensic audit report published earlier this year,” said Mr Tobiko in a recent statement.
Webber Wentzel, the South African audit firm that the CMA hired to investigate the affairs of the motor company found a number of directors criminally liable for the funnelling of millions of CMC funds into foreign accounts in Jersey Island and South African accounts.
The directors are former long-serving chairmen Jack Benzima and Kiereini, former CEO Martin Forster and former directors Charles Njonjo and PK Jani whose names appeared in the report as having participated in the conception and execution of the scheme.
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