This archive report was first published on 5 August 2019.
KenolKobil Insider Trading Scheme Exposed ¶
August 5, 2019
A former CEO of Kestrel Capital, Andre De Simone, has been found to have leaked information about the KenolKobil buyout to two market dealers, sparking an insider trading scheme that caught the attention of the Capital Markets Authority.
De Simone, who was banned for one year from holding a position in any CMA regulated entity and slapped a Sh2.5 million fine, admitted to having told stock agents Aly-Khan Satchu and Kunal Bid of the Sh26 billion KenolKobil sale to French multinational Rubis.
"It was in an incredibly busy period but I do remember discussing with Aly-Khan, I just remember saying I am working on this deal and I’m just trying to get at the close, as I mentioned the KenolKobil deal," De Simone told members of the CMA Ad Hoc Committee that investigated the deal.
De Simone's leaked information was used by Satchu and Bid to trade on the Nairobi Securities Exchange (NSE) listed stock days to the private transaction, earning them significant profits.
The duo, who are chief executives of their stock trading agencies, have denied the insider trading charges and appealed the CMA penalties.
The Capital Markets Authority (CMA) seized Sh458 million gains that it said the insider trading suspects stood to earn from the KenolKobil takeover after buying the stock on the cheap from unsuspecting investors.
Another Sh19 million was recovered in May, bringing the total recovered to Sh477 million.
