A Nairobi based investment banking company, Kestrel Capital East Africa Limited is entangled in an alleged fraudulent sale of equity shares of their former client worth Sh14million shortly after his demise.
Yesterday, when reached for comment via phone calls, short text messages and inquiries through mail, the management of Kestrel Capital did not respond to the matter even after physically visiting their Nairobi head office at Orbit Place in Westlands.
Similarly, when contacted, Kestrel Capital Chief Executive Officer (CEO) and Executive Director Francis Maina Mwangi did not respond to our queries.
Investigations by The Informer established that shares belonging to Davis Wacheru Wachira were mysteriously sold out shortly after his demise in May 2022.
Further, records at the Central Depository and Settlement Corporation (CDSC) shows Wachira’s equity shares have since been sold out.
“Yes, it is true the shares have already been sold out.” Our source who spoke on condition of anonymity and is privy to the goings on at Kestrel Capital intimated.
Besides investment banking, Kestrel Capital also offers brokerage services on the Nairobi Stock Exchange (NSE), bond trading and commercial paper placing, public offerings, corporate finance advisory, mergers and acquisitions, private placements, and other services.
In 2020, the market regulator, Capital Markets Authority (CMA) added extra layer of scrutiny to shield investors from fraud at bourse to stem the rise in fraudulent activities targeting unsuspecting investors on the NSE.
In order to counter frauds, the Capital Markets Fraud Investigation Union (CMFIU) engaged the market intermediaries and agreed that before any transactions take place, the documents involved should be availed to CMA for scrutiny and authentication.
During the 2018/2019 financial year, crime trends in the capital markets moved to a higher level where fraudsters colluded with employees of stockbrokerages to trick investors into fraudulent disposal of shares leading to losses to investors.
In February 2019 CMA fined David Tumain Ksh166.95 million ($1.51 million), being twice the amount of the benefit, which directly accrued to him from irregular trading in fixed income securities while in May 2019, Rodrick Muhoro Ngugi was fined Ksh208.3 million ($1.89 million), or two times the benefit of Ksh104.15 million ($946,818) he made from bond transactions.
During the 2018/2019 financial year, the market regulator recovered Ksh477 million ($4.33 million) following the signing of “No Contest Settlement Agreements” in the case of insider trading on the shares of the oil marketer — Kenol Kobil Plc Counter — before its eventual acquisition by the French firm Rubis Energies.
Mwangi was appointed as the Kestrel Capital CEO in May 2019 to succeed his predecessor Andre DeSimone who exited at a time he was under investigation over insider trading in KenolKobil share ahead of the oil marketer’s Sh35 billion takeover deal.
DeSimone quit the job in April 2019 following CMA’s inquiry into insider trading allegations.