Court throws out Aly-Khan Satchu privacy intrusion suit in insider trading probe


Court throws out Aly-Khan Satchu privacy intrusion suit in insider trading probe

In Summary

  • The decision stems from Satchu challenge of rights violation filed through an application and a supporting affidavit dated February 1,2019.
  • In its ruling however, the court argued for the legality of the search warrant based on provisions that empower the CMA to go after the violators of capital markets regulations.
  • Satchu and Kunal lost a total of Ksh.28.1 million of undue gains made while De Simone was fined a total of Ksh.2.5 million for trading on non-public information.

The commercial court has dismissed claims by stock-broker Aly-Khan Satchu on the intrusion of his privacy by the Capital Markets Authority (CMA).

The decision stems from Satchu challenge of rights violation filed through an application and a supporting affidavit dated February 1,2019.

According to Satchu, the CMA had acted in a clandestine manner in its entry of his office based at the Mirage Office in Westlands.

Further, the Rich Management Limited Chief Executive Officer challenged the jurisdiction of the court in its issuance of search warrant to the CMA.

In its ruling however, the court argued for the legality of the search warrant based on provisions that empower the CMA to go after the violators of capital markets regulations.

“The applicant has not met the threshold for review and the end result is that, the application herein is found to be lacking in merit and is dismissed with costs,” stated Milimani Court Senior Resident Magistrate P.Muholi.

CMA had through their Head of Enforcement Colin Maweu opposed the filing by Satchu in an application on February 8, 2019 citing compliance to the Capital Markets Act.

The commercial court had granted the CMA orders to gain entry to the stockbrokers premises following an application on January 14, 2019 and in line with section 13(A) of the Capital Markets Act which gives the market regulators power to inquire into the affairs of a person including the green light to entry, search and seizure assets.

Former Kresrel Capital CEO Andre Desimone and former KenolKobil CEO David Ohona made for the other respondents in the case but were represented by lawyer Ahmed Nasr in a written submission.

The three were the subject of a near eight month long probe into alleged insider trading of KenolKobil shares in the run up to the public announcement of the acquisition of the firm by French based Rubis Energie on October 24, 2018.

While David Ohana walked scot free from the investigation, Satchu and Desimone were alongside Krestel linked stock broker Kunal Bid the subject of sanctions from the CMA on July 8, 2019.

Satchu and Kunal lost a total of Ksh.28.1 million of undue gains made while De Simone was fined a total of Ksh.2.5 million for trading on non-public information.

The sanctions were related to the purchase of nearly 58 million shares of KenolKobil and are in pursuant of the enforcement of section 32 of the Capital Markets Act which deals with insider trading and market abuses.

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Story By Kepha Muiruri
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