This archive report was first published on 20 November 2019.
On November 20, 2019, the UK court was faced with an interesting securities litigation case involving Tesco Plc, a British multinational company.
The company had allegedly published false information that wooed several investors to make investment decisions concerning its shares.
Upon discovery, the investors sued Tesco Plc to claim and recover losses suffered as a result of the false information.
Back home, the Capital Markets Act in Kenya provides that any person who makes deceptive and misleading information in listing particulars or the company prospectus is liable to pay compensation to an investor who has suffered loss as a result of the untrue or misleading statement.
Fortunately, the Central Depositories Act recognises that a central depository or its nominee shall not be deemed to have an interest in securities which are registered in its name but will only be a bare trustee.
As the financial market becomes more dematerialised and equally more intermediated, with long custody chains, it is essential to understand who has an interest in securities held in an intermediated market.
