Nairobi — The Capital Markets Tribunal has upheld enforcement against stockbroker Kunal Kamlesh Somchad bid for insider trading in the KenolKobil scandal.

This comes after the Capital Markets Authority (CMA), in a Notice to Show Cause (NTSC) in 2019, alleged that Somchad Bid engaged in insider trading in relation to Rubis Energies, SAS's 2018 takeover of Kenol Kobil, which was said to have violated Section 32B (1) of the Capital Markets Act.

In a ruling dated December 11, the court noted that the CAK was 'correct' in imposing the sanctions against stockbroker Kunal Bid.

The court cited that the stockbroker acted as a secondary insider after having a connection with Andre De Simone, the former chief executive of stock brokerage firm Kestrel Capital, which gave the stockbrokers preferential treatment.

The court has, however, noted that the stockbroker should only be penalized in a minor way, given that the degree of his responsibility in the disclosure of MNPI is not the same as that of the primary insider.

The court has thus directed the ad hoc committee to refund the stockbroker Kunal Bid a fraction of the disgorged amount after they imposed a maximum penalty against the stockbroker, which was against what a secondary insider should be given.

"We find that the ad hoc committee ought not to have imposed a maximum penalty against the applicant, being a secondary instructor insider, as it would against a primary insider," the ruling stated.

"In that regard, we direct that the disgorged amount be reduced by half so that the other half be refunded to the Appellant but without interest," it added.