CMA Penalizes Insider Traders Aly Khan Satchu, 2 Others Over Illegal Trade of 59m Shares

July 9, 2019

The Capital Markets Authority has recorded a major win in the fight against rampant financial crimes after punishing stock market traders for insider trading for the first since the law came into effect.

In addition to taking firm action against the three traders – Aly Khan Satchu, Kunal Kamlesh, and Andre Desimone – CMA has recouped millions in fines and gains made by the stockbroking agents in the illegal trade of Kenol Kobil shares.

The markets’ regulator has banned Aly Khan Satchu from holding any key position in a listed firm or an institution licensed by the CMA for a period of three years. CMA has also fined the stock market trader and analyst Kes4.69 million, being the commission received from the illegal trade of Kenol Kobil shares.

The markets authority has imposed a Kes2.5 million on Andre DeSimone, the former CEO of Kestrel Capital. He is also banned from holding a key position in any listed entity for 12 months.

CMA established that the majority of the questionable transactions were carried out by Kestrel Capital. The firm voluntarily surrendered Kes9.86 million to CMA being the commissions earned from transactions done by Kunal Bid and Aly Khan Satchu.

On his part, Kunal has been fined Kes23.4 million which are the gains made by accounts under his management. He illegally traded 2,895,100 million Kenol Kobil shares.

CMA also recovered commissions paid to Kestrel Capital and AIB Capital amounting to Kes333,747 and Kes14,596 respectively.

Investigations by an ad-hoc committee formed by CMA in May established that former Kestrel Chief Andre DeSimone disclosed non-public material information on Kenol Kobil’s impending takeover to the stockbroking officers Kunal Kamlesh and Aly Khan Satchu.

The two then used the insider information to trade roughly 59 million Kenol Kobil shares a week before the takeover information was made public on 24th October 2018.

The committee comprised of four CMA board members, and four independent members namely; retired Chief Justice Dr. Willy Mutunga, Dr. Jim McFie, Patricia Kiwanuka, an expert in Finance and Investments, and Anne Eriksson a former Senior Regional Partner at PWC for the Eastern African region.

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