” Andre DeSimone
Abdul Sheikh
Adrian Tiwari
Aly-Khan Satchu
Anand Radia
Capital Markets Authority
Data Handlers
David Ohana
Farzeen Jamal
Kestrel Capital
Mr Ohana
Nairobi Securities Exchange
Nureen Moledina
Rubis Énergie
Sh850.5 million

Kenol boss, CMA in deal on insider trading probe

KenolKobil #ticker:KENO chief executive David Ohana has agreed to co-operate with the Capital Markets Authority (CMA) in the ongoing investigations into suspected insider trading of the oil marketer’s shares ahead of the announcement of the company’s buyout by French firm Rubis Energie.

Mr Ohana in a consent filed in court says he will not challenge CMA’s investigation, including a search-and-seize court order that saw the regulator take communication devices from the KenolKobil CEO and two other suspects, stock market trader Aly-Khan Satchu and Kestrel Capital executive director Andre DeSimone.

“The third respondent has voluntarily co-operated with the applicant in terms of the orders issued on January 14, 2019, and has confirmed that he takes no issue with the manner in which the orders were sought, granted and executed against him by the applicant (CMA),” reads the consent filed in court.

The stakes are high for the three suspects in the insider trading investigations given their positions as investors and professionals who are subject to regulatory actions by CMA.

The deal between Mr Ohana and the CMA leaves Mr Satchu isolated, being the only one of the three who has challenged the regulator’s investigations in court.

Mr Ohana had signed an agreement to sell his shares to Rubis in the ongoing transaction that stands to earn him Sh1.1 billion profit.

A party is guilty of insider trading if he leaks material, non-public information or uses the same to buy or sell securities for personal gain.

Mr Satchu, who has been implicated in leaking the material information to potential investors, has gone to court challenging CMA’s claims and the investigation methods, arguing that his right to privacy has been violated.

In contrast, Mr Ohana in the consent has agreed that the regulator may use information retrieved from the smartphones and computers seized by the regulator to take enforcement actions against him.

The CMA believes that five investors received advance information to open accounts at Kestrel and buy a total of 56.8 million shares of KenolKobil with intention to gain from the November 24, 2018 announcement that the oil marketer would be bought out by Rubis.

The shares were bought days before the takeover announcement at a cost of Sh850.5 million or an average of Sh14.9 per share in the week preceding the disclosure of the Rubis offer.

This positioned the 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 buyout price of Sh23 per share.

Mr Satchu proposed to split in half profits generated from the insider trading deal in communication with one of his co-conspirators, according to WhatsApp message conversations retrieved by East African Data Handlers on behalf of the regulator.

“I have actionable intelligence on a share at the Nairobi Securities Exchange please advise if this is something you want to look at it’s a buyout.

“I can open an account for you at Kestrel in out for a 50/50 split of profits –quick in early exit next week and out on announcement,” Mr Satchu allegedly told one of his clients in a WhatsApp chat.

Share this Post