Reports that the Capital Markets Authority (CMA) identified suspect deals on the KenolKobil counter at the Nairobi Securities Exchange are shocking.
According to the markets regulator, it found potentially irregular trading of the KenolKobil counter ahead of its looming buyout.
We urge the CMA to investigate the suspect trades and bring the culprits to book.
The integrity of the market is at stake hence the need for punitive action on the perpetrators to restore confidence.
The identity of the offending traders should be revealed despite market insiders saying that the shares were traded through high net worth nominee accounts.
The insider trading seems to have been kicked off before French fuel storage company Rubis Energie published a Notice of Intention to take over the oil marketer.
it seems that some people privy to the information embarked on a buying spree in order to gain unfair advantage .
We welcome the CMA’s move to freeze the suspicious accounts.
We, however, urge the regulator to move a step further and name and shame the culprits. The identities of those behind the nominee accounts ought to be revealed.
The French company had on October 23 bought a 24.99 per cent stake or 367,793,124 KenolKobil shares from Wells Petroleum enabling it to achieve the minimum ownership threshold it needed to launch a takeover bid.
Analysis of trades in KenolKobil shares this month reveals a significant increase in volumes between October 15 and October 22.
Investors moved 61.1 million shares worth Sh909.8 million during the period. According to the CMA, buyers of the shares stand to earn about Sh500 million once the takeover is concluded.
The CMA must ensure that it gets to the bottom of the matter by meting out stiff punishment including prosecution.
We cannot allow the credibility of the securities market to be compromised by a few rogue and greedy investors. That’s the reason why there are laws regulating the trading of shares. They must be enforced to the letter.
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