The Capital Markets Authority (CMA) has raised concerns that delays by the Judicial Service Commission (JSC) to appoint members of the Capital Markets Tribunal has created a loophole for rogue players to hide from regulatory actions.
CMA chief executive officer Wyckliffe Shamiah said the lacuna is affecting investors whose deals have been frozen by disputing parties who have filed cases before the tribunal. The High Court ruled last year in favour of activist Okiya Omtata—now the Busia Senator— to move the appointment of tribunals from the Executive to the Judiciary.
Mr Omtata, with Katiba Institute as Interested Party, had challenged the appointment of tribunals by the President and CSs.
CMA says the transition has taken a while which has seen member terms come to an end thus rendering the markets tribunal ineffectual over quorum.
Several company executives and management who have been fined by the regulator have sought to appeal at the tribunal where their cases have stalled for years, helping them delay paying these penalties.
“We have ruled on a lot of matters affecting parties who have gone to the tribunal knowing it is not fully constituted to hide there as a safe haven. For there to be justice the tribunal should be in place to discourage this,” Mr Shamiah said on Tuesday.
Chase Bank directors, former National Bank of Kenya Officials, Real People executives and Imperial Bank owners are among those who have filed cases fighting regulatory fines at the markets tribunal.
The regulator is also facing an appeal against financial penalties by individuals implicated in the insider trading saga during the sale of Kenol Kobil to French firm Rubis Energie.
A proposed takeover by BOC Kenya of its rival Carbacid has also been held up after minority BOC shareholder Ngugi Kiuna sued at the tribunal.
The cases have stalled because JSC is yet to appoint a secretary and another member of the five-man team meant to serve three-year terms at the tribunal.