CMA commences enforcement proceedings against former Imperial Bank directors
Nairobi May 31 2016…. The Board of the Capital Markets Authority (CMA) has today commenced enforcement proceedings for the individual former directors of Imperial Bank Limited (IBL) under Section 26(8) of the Capital Markets Act, which requires the Authority to give persons to be affected by its enforcement actions an opportunity to be heard before any action is taken.
The Authority is empowered to take such enforcement actions as appropriate to redress breach of any provisions of the Act, regulations, rules, guidelines, notices or directions issued by CMA. The steps taken by CMA are also aligned to the broader mandate of the Authority of protecting investors in the capital market.
The hearings are focused on determining the joint and several liability of the former IBL directors in connection with the un-concluded Ksh2 Billion bond issue, which commenced in August 2015.
The enforcement hearings are expected to determine the former directors’ role in and liability for; material mis-statements contained in the Information Memorandum issued to the investing public; omissions and failures of the former board members in failing to disclose material changes in circumstances of IBL in relation to the terms of the bond offer to the investing public and CMA when it came to their attention; and omissions and failures of former IBL board members to take or facilitate appropriate interventions to terminate or otherwise suspend the raising of capital from the public based on materially incorrect information.
In light of the gravity of the allegations to be determined, the hearings are being conducted by the full CMA Board with the objective of being concluded in an expeditious and efficient manner subject to the requirements on procedural fairness and reasonableness.
The CMA has noted the proceedings were delayed to allow for the collection of necessary evidence and the actions will be without prejudice to potential liability of the former directors with respect to findings of complicity or knowing perpetration of the fraud scheme that resulted in the placement of IBL under receivership by the Central Bank of Kenya on October 13, 2015.
Notwithstanding the commencement of this action, the CMA board remains committed to working with all relevant stakeholders to facilitate the early resolution of the IBL hearings and holding to account all parties found to have been involved in the fraud scheme that remains under investigation.
ENDS
BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY
The Capital Markets Authority was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence. The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest. For more information contact Antony Mwangi, Head of Corporate Communications, on amwangi@cma.or.ke
