Reprieve for Kiereini as court suspends Sh189m CMA case
Businessman Jeremiah Kiereini at a past event. PHOTO | FILE
Businessman Jeremiah Kiereini has won a reprieve after the High Court on Wednesday temporarily stopped a case filed by the capital markets regulator claiming Sh189 million that he allegedly defrauded motor dealer CMC Holdings when it was a listed company.
Justice Fred Ochieng on Wednesday ruled that the Capital Markets Authority’s tribunal had completed its inquest into Mr Kiereini over allegations that he fraudulently received millions of shillings when he was chairman of CMC.
The Sh65.2 million that Mr Kiereini is alleged to have received has increased due to fines and accrued interest.
Mr Kiereini in February asked the court to strike out CMA’s claim after the regulator started proceedings against him before an ad hoc tribunal could conclude his case.
Justice Ochieng said in his ruling that allowing the two hearings to proceed concurrently would be subjecting Mr Kiereini to double jeopardy, which is against the law.
He however held that striking out the case would also not be appropriate as the amount of money at stake is substantial.
“Making Mr Kiereini pay the sum before the process before the tribunal is complete will render the judicial process nought. I hold that the right balance is struck when these proceedings are stayed until CMA completes the tribunal hearing ordered by the Court of Appeal,” the judge said.
CMA sued Mr Kiereini, Kingsway Family Holdings Limited and Kingsway Nominees Limited — both owned by the billionaire — in August in a fresh bid to recover the funds.
The regulator claims the billionaire received the cash from a slush fund opened by CMC and stashed in a Jersey account.
CMA told the judge that its suit was aimed at freezing Mr Kiereini’s assets until its tribunal proceedings are completed. But the judge ruled that the documents filed in court were seeking to either compel Mr Kiereini to pay the sum or have the regulator sell his property to recover the money.
“CMA says this suit was only instituted to stop Mr Kiereini from disposing of his property before the hearing is done. However, the pleadings before me show that CMA was seeking enforcement action against Mr Kiereini. It shows that determination of Mr Kiereini’s culpability has already been made,” the judge added.
The Court of Appeal in January ruled that the regulator had not given the former head of civil service a fair hearing before pursuing him for the Sh189 million and ordered CMA to first try him in its tribunal before moving to court.
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