A Kenol-Kobil petrol station in Nairobi. FILE PHOTO | NMG
KenolKobil shares that were at the centre of an insider trading
investigation ahead of the firm’s takeover bid by French firm Rubis
Energie have been cleared for sale.
The move has raised queries over the regulator’s handling of the transaction.
In
a Friday notice, Rubis said that it had received sell commitments from
shareholders holding 96.85 percent of the remaining 1.183 billion shares
it does not already own, making the offer a success.
This now paves the way for the oil marketer’s delisting from the Nairobi Securities Exchange (NSE).
The
Capital Markets Authority (CMA) had in October flagged as suspicious
purchases of 56.8 million KenolKobil shares at a cost of Sh850.5 million
by five individuals through stocks agent Aly-Khan Satchu in the days
leading up to the announcement of Rubis’ offer.
This positioned them to book a 53.6 percent gain amounting to Sh455.9 million, based on the buyout price of Sh23 per share.
Court
filings by the CMA have so far revealed that the regulator has
retrieved evidence of mobile phone communication between Mr Satchu and
buyers of the shares under investigation.
Frozen
Given that the balance that has not been committed for sale is
only 37.7 million shares, questions have now arisen over how the CMA is
handling these 56.8 million shares whose owners’ trading accounts were
frozen pending conclusion of investigations into suspected insider
trading.
Rubis’ announcement on Friday means that some
or all of the shares under investigation have been offered to the French
firm for sale.
Shareholders who did not consent to the
buyout are set to be acquired compulsorily as per CMA takeover rules,
before the company is delisted from the NSE.
The CMA as
well as transaction advisors SBG Securities had not responded to
queries on the matter by the time of filing this story.
Rubis also declined to comment on the issue, instead referring all queries back to the regulator.
“Please
refer to the notice that was published in the newspaper on Friday for
further details of the offer results and acceptances…regarding the other
queries raised in your email, please refer them to the CMA,” Rubis
chief finance officer Bruno Krief told the Business Daily.
Insider trading
Shares
that have been frozen are not tradeable, meaning that Rubis may have to
hold off paying for the shares pending determination of the insider
trading investigations.
The volume of contentious stock
(3.7 percent of KenolKobil’s issued shares) is however not large enough
to derail Rubis from achieving the 75 percent in acceptances it needs
to conclude the buyout.
The successful disposal of the
shares by the five buyers would, however, leave the CMA with little
recourse beyond imposition of a fine should it successfully argue its
insider trading case against Mr Satchu.
The CMA Act
imposes a fine of not more than Sh2.5 million or a jail term not
exceeding two years for first time offenders in the offence of insider
trading.
It also allows the regulator to compel the
offender to make a payment equal to the size of the gain made or loss
avoided as a result of the deal.
The CMA is yet to disclose whether the buyers introduced by Mr Satchu are party to the investigations.
ABC
Capital corporate finance manager Johnson Nderi said that the buyers
could as well fall back on this, arguing that they are free to do with
their shares as they deem fit.
Escrow account
“CMA’s
remedy might be to get a court order, which would allow the holding of
the proceeds in an escrow account pending the determination of this
matter,” said Mr Nderi.
In the meantime, Rubis is moving on with the acquisition plans.
The
firm has successfully obtained an indefinite extension of the
suspension of KenolKobil shares from trading at the NSE following the
completion of reconciliation and announcement of results of the offer.
“The suspension of trading will facilitate the anticipated acquisition,” said the NSE in a notice Monday.
Rubis
said in their notice on Friday that they wanted the suspension to
remain in place until they complete the acquisition of the remaining
37.2 million shares.
The firm will pay Sh26.35 billion
for the shares for which it has already received a sale acceptance, and
an additional Sh855.8 million once it moves to make the compulsory
acquisition of the remaining uncommitted shares.
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