Capital markets to appeal against Jeremiah Kiereini verdict

By BENARD SANGA

The capital markets regulator has stepped up its fight against businessman Jeremiah Kiereini. The Capital Markets Authority (CMA) said it will seek temporary orders to bar Kiereini from sitting on boards of publicly listed companies pending an appeal.

This is after the High Court in Nairobi lifted the ban that barred the businessman from sitting on boards of listed companies.

 In the ruling read by Justice David Majanja last week, the court upheld Kiereini’s arguments that CMA had infringed his rights to a fair administrative hearing.

Retrogressive judgment

Kiereini argued that he wasn’t given a chance to defend himself. But addressing the Press in a Mombasa hotel yesterday, CMA acting Chief Executive Paul Muthaura said the judgment was retrogressive in unduly fettering the administrative mandate of the Authority.

He said the ruling would set a bad precedent and that the regulator’s legal team would move to the court of appeal to overturn it.

“We have reviewed the ruling and noted that the judge was against precedents he has set in the past on similar matters,” said Muthaura.

“We will appeal so that the court can clarify on the law about the procedure on how to enforce decisions made by CMA tribunal.”

Muthaura said Justice Majanja’s verdict appeared to contradict earlier judgments that had upheld the regulator’s enforcement actions against other market participants.

 “The judgment appeared to contradict an earlier ruling in a High Court petition involving Dry Associates Ltd versus Capital Markets Authority and two others,” said Mr Muthaura.

“The court held in a similar petition that the petitioner’s rights under article 47 had not been infringed as well as earlier judicial decisions on the powers of a Committee of the Board to provide an opportunity to be heard.”

He observed that the businessman had been given an opportunity to defend himself before a committee headed by Retired Justice Aaron Ringera, but he waived it as per a letter from his advocates dated April 27, 2012.

Former Attorney General Charles Njonjo, businessman Richard Kemoli, and CMC’s top shareholder Peter Muthoka are among the seven individuals who were affected by CMA’s enforcement action.

The High Court ruling means that Kiereini can now rejoin the boards of public companies, including CFC Insurance Holdings and Unga Group Ltd, where he was disqualified as a director by CMA in August last year.