Capital Markets Authority (CMA) Imposes Fines on Directors of Listed Companies for Trading Violations

The Capital Markets Authority (CMA) has imposed fines totaling more than Sh8 million on several directors of listed companies and an auditor for violating trading rules in the financial year ending June 30, 2023. The fines were disclosed in new reports, although the specific companies and individuals involved were not revealed.

CMA’s Chief Executive Officer, Wycliffe Shamiah, stated that the Authority took enforcement actions against those who breached the legal and regulatory framework. Most of the affected individuals opted to settle the fines imposed on them.

The regulator’s annual report for 2022/2023 showed a significant increase in earnings from fines, penalties, and levies, reaching Sh10 million compared to Sh1.12 million in the previous year. CMA emphasized its commitment to investor protection initiatives to enhance confidence in the capital market, including investigation and enforcement processes, an online whistleblower portal, investor alerts, and market arbitration.

The recent disclosures follow a decision by the Capital Markets Tribunal allowing CMA to penalize former and current directors of micro-lender Real People Kenya Ltd (RPKL) for diverting funds from a bond issuance to South Africa. The tribunal dismissed an appeal by four ex-directors who tried to halt CMA’s proceedings, with one current director, Yvonne Godo, also facing sanctions.

In addition to the RPKL case, a former acting CFO of National Bank of Kenya (NBK), Wycliffe Lindong’a Kivunira, is facing a Sh1 million penalty for financial impropriety. The investigations revealed his involvement in preparing false financial statements and potential embezzlement of funds at NBK.

Overall, CMA’s actions against these individuals reflect its commitment to upholding regulatory standards and protecting investors in the capital market.