Activist Okiya Omtatah has moved to court seeking to disband the Capital Markets Authority's (CMA) Board of Directors.
Despite being directly put on spot by President Uhuru Kenyatta during the launch of the annual report on the state of the Judiciary on Thursday for filing many cases stopping government projects, Mr Omtatah claimed that CMA's board of directors were handpicked.
Mr Omtatah also protested against the board's intention to recruit a new chief executive officer.
Last December, CMA picked Mr Wickliffe Shamiah as acting CEO until Mr Paul Muthaura's replacement is found.
Mr Shemiah, who had been serving as the director of market operations since November 2011, has been acting CEO from January 1.
"The appointment of the new CEO, who is likely to be in office for the next eight years, is so substantive that it cannot be left to the conflicted board which is captive to a section of the Capital Markets," said Mr Omtatah.
RULE OF LAW
He claimed that unless court intervenes, the new CEO, who is expected to provide leadership in the regulation and development of Kenya's capital markets, will be appointed by the National Treasury Cabinet Secretary on the recommendation of the impugned board for a four-year term.
He alleged that having been appointed through a process that blatantly violates rule of law, transparency, public participation, the responsibilities of leadership, and the use of executive power, the chairperson and independent members of the CMA board should not be allowed to continue holding public office.
He argued that to execute its mandate as an impartial regulator of an emerging sector, it is necessary that the board of the CMA is appointed strictly according to the Constitution and national legislation to ensure its autonomy from vested interests, so that all players in the industry can be equal.
He has sued the Public Service Commission, the State Corporations Advisory Committee, the Attorney General and the seven board members in a suit in which CMA is listed as an interested party.
According to the activist, Mr James Ndegwa was appointed chair of the board via a Gazette notice on March 2018 and is to serve for three years yet he is conflicted because he has affiliations to ICEA, Stanlib and NCBA banks.
He faulted the National Treasury CS for handpicking and appointing the other board members without subjecting them to a transparent, competitive, inclusive and merit- based recruitment process open to public participation.
He argued that currently, the chairperson and members of the board are captive to vested interests, including being agents of banks hence CMA would likely enact and enforce pro-bank policies which stifle the emergence and growth of non-banking capital markets.
He wants appointment of board members to be declared unlawful, quashed. He also wants CMA to be compelled to appoint new members in compliance with the law.