Capital Markets

CMA warns rogue investors as power hurdle now cleared

 Paul Muthaura
CMA chief executive officer Paul Muthaura. FILE PHOTO | NMG 

Capital Markets Authority (CMA) chief executive Paul Muthaura says its enhanced power will see it quickly investigate and take action against rogue persons and firms, with less court injunctions.

The Treasury’s proposal to empower CMA to enforce penalties and sanctions on rogue market players and latest decision by Court of Appeal on the Authority’s powers will see his team face less legal hurdles, Mr Muthaura said.

“That broadening of CMA powers is very well received by the Authority. The challenge we have been facing has not been so much in respect to the scope of our powers but around judicial interpretation of the same,” Mr Muthaura said in Nairobi.

Last week, CMA won a court battle against directors of the collapsed Imperial Bank, allowing it to investigate them over the Sh2 billion corporate bond that the lender issued a month before it sunk into receivership.

Three appellate judges overturned a decision of the High Court that had barred the CMA from investigating circumstances under which the bank proceeded with the bond despite insider knowledge that it was in trouble.


Mr Muthaura said the decision had given a “very clear and final decision” in terms of how the powers of the Authority should be interpreted going forward when it comes to holding individuals and bodies to account.

“That decision will likely have the most drastic impact in smoothness in efficiency as we effect our powers.

Many court injunctions have been issued based on perception that we have no powers to investigate and also fine,” Mr Muthaura said.

“We are now very confident that we will move with speed and courts will now be guided by that decision to avoid issuance of injunctions that often serve to delay rather than address fundamental issues.”

The injunctions have seen several cases involving CMA and companies or individuals stall, causing erosion of investor confidence.

Last year, CMA unveiled 2018-2023 strategic plan, promising to bolster its investigative unit to help clear market conduct investigations within six months so as to increase confidence in the capital markets.