29 December 2012

Kenya: Banned Tsavo Boss Hits Back At CMA

Tsavo Securities Ltd managing director Fred Mweni, who has been barred by the Capital Markets Authority from carrying out any market activity, now says the decision was unfair and a personal attack on him.

The bonds trader has accused the regulator and other 'influential' market players of targeting him since he has been pushing for changes in the trading laws, while the other parties want to keep the status quo.

Mweni, who is the main shareholder of Tsavo, says the local securities market has stagnated due to delays by the market regulator to reform.

Such changes include allowing of short selling for listed securities,buy backs, securities lending and licensing primary dealers.

The regulator, in a newspaper notice on Thursday banned Mweni from carrying out any regulated business for or on behalf of Tsavo Securities or serve as a director of any listed company... in the capital markets in Kenya."

CMA said Mweni failed to supply it information requested and thus obstructing the authority in the performance of its statutory duties, contrary to section 34 (1) (c) of the Capital Markets Act.

This has led to revelations that there could be an ongoing investigation into a multi-billion shilling scam in treasury securities trading.

In a letter seen by the Star, dated October 18, CMA wrote to Tsavo accusing it of involvement in transactions in the trading of government bonds. Tsavo is licensed by CMA as a investment Adviser . But it had initially applied for a stockbroker license in 2006.

The bonds market currently has an annual turnover of around Sh1.078 trillion, up from Sh38billion in 2007. Mweni said his firm handled about Sh270 billion of the bonds trade.

"It is not possible that we would have kept any information from CMA, since every transaction we do is out there,and we supplied everything they asked for," Mweni said.

He is scheduled to meet the Capital markets officials on January 7. "I think the decision was unfair , nevertheless they should give me a list of the things i should;d comply with and clear my name," but he said he does not intend to fight for the position back.

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