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Capital Markets Authority reigns in on rogue firms

NAIROBI, KENYA: The Capital Markets Authority (CMA) cracks whip on errant investment banks, stockbrokers, fund managers and listed firms as the regulator moves to instill discipline in the operations of the local securities market.

The authority’s show of mighty came in the fore after it slapped a Sh7 million fine on Faida Investment Bank for over-drawing clients’ account and failing to maintain proper records in breach of the laid-down regulations.

The crimes, which were committed at the height of the market’s boom in 2007, also include failure by the investment bank to avail books and records, which the firm is required to maintain and absence of bank reconciliation records for all its ten (10) bank accounts for the period from April to September 2008.

According to the authority’s latest annual report (2012), the financial penalty imposed on Faida Investment Bank in 2008 and 2010 accumulatively stood at Sh13.58 million, but the institution got a reprieve after the punishment was later reduced to Sh7 million on March 13, 2012.

The regulator, which is also seeking more powers to discipline listed firms that have retained over-age directors fined East Africa Portland Cement Company (EAPCC) a total of Sh200,000 for its boardroom wars, which saw the trading of its shares suspended for 60 days at the Nairobi Securities Exchange (NSE).

“ We shall be looking at the actions to be taken against companies and shareholders who are still retaining over-aged directors. These guys are being retained by major shareholders,” Chairman Kung’u Gatabaki told The Standard on Saturday.

EAPCC was fined Sh50,000 for failing to disclose changes in its board to CMA, Sh50,000 for suspending some of its directors without informing the regulator and a further Sh100,000 for issuing public announcement on the same without CMA’s approval.

CMA also fined lCentum Sh50,000 for failure to issue profit warning after its earnings fell by more than 25 per cent last year. Apex Africa Investment Bank was reprimanded for unauthorised sale of clients’ shares, while Sterling Capital was penalised Sh50,000 for a similar offence.

Dry Associates was handed a Sh1 million penalty for failing to maintain a risk management system and proper internal controls, which led to loss of investors’ funds in the Crown Berger commercial paper programme.

Crown Berger were ordered to settle the principal amount totaling Sh30.81 million due to investors, as the firm failed to reconcile its registers with those of Dry Associates.

Other firms that were either reprimanded or had their shares suspended for contravening CMA regulations include CMC Holdings Ltd, Cannon Asset Managers Ltd, Mabati Rolling Mills, Wellman Group, Lions Capital Ltd, Kenya Airways Employee Share Ownership Scheme (ESOP), Kakuzi Ltd and Amana Capital Ltd.


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No pardon for drug traffickers in Indonesia-Ambassador

The Indonesian Ambassador to Nigeria, Mr Harry Purwanto, on Saturday ruled out any clemency for anyone caught carrying narcotic drugs in his country.

He said that his home government would not grant pardon to anyone involved in drug trafficking in Indonesia.

Purwanto disclosed this in Lagos while reacting to a report that two Nigerians were on death row in Indonesia for drug-related offences.

The envoy said that capital punishment would be meted to Nigerians who engaged in narcotic crimes, as well as to other foreigners and Indonesians engaging in the criminal acts.

“Let me say that Indonesia, currently, has very strict punishment measures for anyone engaged or that is planning to engage in drug trafficking.

“Let me also say that between 72 and 75 young Indonesians that were involved in narcotic crimes are currently in detention.

“My president, President Joko Widodo, is really committed to fighting drug trafficking, and has continued to maintain a firm stance against anyone arrested for involving in narcotic crime.

”So, there will be no clemency for anyone, be they Indonesians or other foreigners, arrested for drug-related offences,’’ he said.

According to him, Indonesia will always resort to capital punishment after it has thoroughly investigated and exhausted the necessary legal processes.

Harry, however, said that his government would, sometime, only give consideration to arrested pregnant women, teenagers and mentally-deranged offenders.

The ambassador appealed to Nigerians to desist from visiting Indonesia for drug related-offences or allowed themselves to be used for drug trafficking.

Harry said that the existing cordial relationship between Nigeria and Indonesia would be stronger, if people of both countries obey the laws of their host countries.


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A world free of the death penalty

The European Union Delegation to Ethiopia celebrated the World Day against the Death Penalty in collaboration with African Union last Wednesday at the French Cultural Center in Addis Ababa and Alliance France. The participants of the event mainly composed of the diplomatic community argued that capital punishment is inhuman and unnecessary since no legal system is flawless; any miscarriage of justice can lead to a tragic loss of innocent life. Seventeen countries in Africa have abolished the death penalty. Egypt was the first and now 24 counties are in the process of abolishing it. With the exception of Belarus, no execution has taken place in Europe in the last fifteen years. The Council of Europe (CE) counts 47 member states which includes 27 member states of the European Union (EU). The CE and EU urged all countries which still retain the death penalty to apply a moratorium on execution and support the global resolution on a moratorium on the use of death penalty. The global moratorium will be put to a vote on the next United Nations General Assembly.


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