The High Court has dismissed a petition by former Kestrel Capital CEO Andre DeSimone seeking to quash a ten-year suspension as a member of the Institute of Certified Investment and Financial Analysts (Icifa) on accusations of insider trading during the sale of KenolKobil to French firm Rubis Energie.
Mr DeSimone was also slapped with a fine of Sh1.1 million by Icifa on the claims of disclosing price-sensitive material relating to the takeover in 2018 to two stockbroking agents.
In his High Court application, he faulted a disciplinary committee formed by Icifa on the matter, saying the same allegation had been heard and concluded by Capital Markets Authority (CMA) and Icifa’s penalties, therefore, amounted to double jeopardy.
The CMA found him culpable of insider trading, disqualifying him from holding key offices or directorships of a listed company or CMA approved institutions for one year, and also fined him Sh2.5 million. He paid the penalty and lodged an appeal against CMA decision.
Justice Anthony Ndung’u said in his ruling that section 29(3) of the Investment and Financial Analyst Act provides for an appeal with the council within 60 days after the disciplinary action, with limited room to chase redress via the High Court.
“From the disclosed facts, the applicant who was duly notified of his right of an appeal as provided in law did not lodge an appeal as envisaged in law but instead filed the case before the High Court,” the judge said.
The court said the High Court cannot review an administrative action or decision unless the mechanisms, including an appeal or review and all remedies available are first exhausted.
Icifa maintained that Mr DeSimone has not exhausted the administrative remedies available to him in challenging the decision of the committee.
The body further argued that there was no double jeopardy in the case since Icifa and CMA are two distinct institutions established under respective legislations. Whereas the CMA role is to regulate market players, Icifa argued, its role is concerned with examination, registration, certification and discipline of analysts.
Mr DeSimone was accused of sharing information with agents on the Sh26 billion KenolKobil sale to Rubis, allowing them to take advantageous positions to book hefty profits. The firm has since been delisted after the conclusion of the deal.
The CMA seized a total of Sh458 million gains that insider trading suspects stood to earn from the KenolKobil takeover— relating to suspicious trades that were initiated through 14 accounts that were frozen in the aftermath of the announcement of the deal which caused a rise in the firm’s share price.
