Kestrel Capital executive director Andre DeSimone. FILE PHOTO | NMG
The long-serving chief executive of stockbrokerage firm Kestrel Capital East Africa, Andre DeSimone, has resigned.
Mr
DeSimone exits under a cloud of ongoing investigations into suspected
insider trading of KenolKobil’s shares ahead of the oil firm’s buyout by
French conglomerate Rubis Énergie.
The board of the
investment bank Tuesday said Mr DeSimone resigned from his roles as CEO
and director at a Friday board meeting.
His exit
appears to be a fallout over insider trading investigations by the
regulator, which have blighted the firm’s image in recent months.
24-year reign
His
exit, which was immediate, brings to a close his 24-year reign at the
helm of one of Kenya’s leading investment banks. He started his career
at Kestrel in January 1995.
“The board accepted the resignation and has instructed the
company to inform all appropriate authorities, including the Capital
Markets Authority (CMA), of Mr DeSimone’s resignation,” said a brief
statement issued by Kestrel’s board chaired by the firm’s founder,
Charles Field-Marsham.
“The company has initiated a process to replace the CEO and will announce his successor at the appropriate time.”
Mr
Field-Marsham is himself, together with Kestrel’s stockbroking agent
Aly-Khan Satchu, also facing enforcement proceedings for their role in
the suspected insider trading in the days leading up to the October 24th
announcement of Rubis’ buyout offer for a premium.
Suspicious dealings
The CMA, the regulator, had in October flagged as suspicious dealings in KenolKobil shares through 14 accounts.
Charges
against KenolKobil chief executive David Ohana, who was initially being
investigated for his role in the suspected insider trade dealings, were
dropped after investigation findings failed to “establish evidence of
potential misconduct” on his part.
A
party is guilty of insider trading if it leaks material,
price-sensitive and non-public information or uses the same to buy or
sell securities for personal gain.
The insider trading
is believed to have positioned five investors – Abdul Sheikh, Farzeen
Jamal, Nureen Moledina, Anand Radia and Adrian Tiwari— to book a 53.6
percent gain amounting to Sh455.9 million, based on the KenolKobil
buyout price of Sh23 per share.
The CMA said on March
12 said it had seized Sh458 million gains that the insider trading
suspects stood to earn from the KenolKobil takeover as shareholders of
the oil marketing firm started receiving Sh26.35 billion buyout cash.
“The
funds surrendered to date (March 12) relate to 90 percent of the
quantum of suspicious trades identified through a total of 14 accounts
that were frozen in October 2018 to facilitate investigations,” the CMA
said.
Compensation fund
The
recovered funds will be transferred to the Investor Compensation Fund —
a kitty that the regulator uses to partially refund investors in the
event of losing cash through collapse of a stockbroker or an investment
banker.
Rubis, which initially bought 367.7 million
shares or a 23.72 percent stake in the oil marketer, said on March 8 it
had received sell commitments from shareholders holding 96.85 percent of
the remaining 1.183 billion shares it did not already own, making the
offer a success.
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