This archive report was first published on 2 July 2019.
On July 2, 2019, the Court of Appeal upheld the Capital Markets Authority's (CMA) power to go after rogue market players. The court ruled that the regulator's twin role as licensing and enforcement agency cannot be used to claim bias.
Former directors of the collapsed Imperial Bank, including Alnasir Popat, Omurembe Iyadi, Jinit Shah, Anwar Hajee, Hanif Somji, Vishnu Dhutia, Eric Bangi, Christopher Diaz, and Mukesh Patel, had argued in the High Court that since CMA had approved the bond, it was biased in trying to punish them.
However, a three-judge bench hearing the appeal ruled that CMA even after granting approval was still empowered to investigate and take action against the directors as they could have deliberately given misleading information to get approvals.
‘With respect, we do not think the trial court’s findings on the impartiality of the apprehension of bias was well founded,’ said Court of Appeal judges Erastus Githinji, Daniel Musinga, and Otieno Odek.
The directors of the failed Imperial Bank are facing financial penalties as well as being blacklisted from holding a similar position in any listed company if they are found guilty by CMA. They may also be slapped with fines of up to two times the amount of the benefits accruing to them as a result of the breach.
