Kestrel Capital Chairman & Founder Charles Field-Marsham. The inclusion of the Canadian-based businessman in the list of those to face CMA enforcement proceedings adds an interesting angle to the whole saga

Charles Field-Marsham, a son-in-law to former powerful Cabinet minister the late Nicholas Biwott, is among three individuals facing punishment by the Capital Markets Authority (CMA) over the insider-trading of KenolKobil shares before the Ksh 36 billion buyout of the oil marketer by French firm Rubis Energie was made public.

Others are Kestrel Capital Executive Director Andre DeSimone and their stockbroking agent, Mr. Aly Khan Satchu. The Canadian- based Field-Marsham is the stock brokerage firm’s founder and chairman.

“Upon review of the investigation findings and recommendations, the CMA Board has resolved to initiate enforcement proceedings against the Kestrel Capital Executive Director, Mr. Andre DeSimone, Kestrel Capital Chairman & Founder, Mr. Charles Field-Marsham, and their stockbroking agent, Mr. Aly Khan Satchu, through issuing Notices to Show Cause,” CMA said in a statement.

“The recipients of the notices to show cause have been granted an opportunity to formally respond to allegations made against them and to appear before the CMA Board to make any submissions before a determination is made,” it added.

KenolKobil chief executive officer, David Ohana has, however,been left off the hook after the regulator’s probe failed to establish evidence of potential misconduct on his part with regard to the deal.  “No enforcement proceedings will, therefore, be initiated against him,” it said.

Ohana is the biggest beneficiary of the Rubis deal after he agreed to sell his stake to the French firm, which will now earn him Ksh 1.1 billion profit following clearance by CMA.

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According to Rubis, payments to shareholders who accepted the Rubis offer are being processed. It added it has now started the process to purchase the remaining shares in KenolKobil representing 2.4% of the issued shares of KenolKobil by way of compulsory acquisition as provided for in the Companies Act.

Initial investigations had indicated he deleted information, including e-mails, text and WhatsApp messages from his a Samsung mobile phone and a MacBook pro laptop though investigators managed to retrieve them with the aid of East African Data Handlers.

KenolKobil CEO David Ohana. CMA says there is no evidence of wrongdoing on his part.

But in a signed an agreement with CMA, Ohana said he will not to challenge its probe including a search-and-seize court order that saw the regulator take away his devices. Also seized were an iPhone and a laptop belonging to Satchu, who challenged the move arguing his privacy had been surrendered.

KenolKobil’s shares were snapped up days before the takeover announcement for Ksh 850.5 million or an average of Ksh 14.9 per share in the week preceding the disclosure of the Rubis offer.

In October last year, Rubis Energie said it had completed the acquisition of a 24.99% stake from KenolKobil’s largest shareholder – Wells Petroleum Holdings – and has made a bid to acquire the remaining 75.01 per cent stake from the other shareholders at a price of Ksh 23 per share.

Five investors, Abdul Sheikh, Farzeen Jamal, Nureen Moledina, Anand Radia and Adrian Tiwari were as a result positioned to make a 53.6% profit or Ksh 456 million.

CMA now says it has recovered Ksh 458 million acquired through the insider trading.

“The surrendered funds constitute 90% of the amount identified through a total of 14 accounts that were frozen in October 2018 to facilitate forensic investigations. The recovered funds will be paid into the Investor Compensation Fund,” it said.

The CMA investigation established that investors had been advised and encouraged to trade KenolKobil Plc shares based on what may constitute material price.

“The investigations relating to the balance of the accounts flagged in connection with suspicious trading activities are ongoing,” said the statement.

The inclusion of the Canadian-based Field-Marsham in the list of those to face CMA enforcement proceedings adds an interesting angle to the whole saga. The Biwott family will earn Ksh 14 billion from the buyout.

The 51-year-old is married to Biwott’s daughter, Rita, whom he met at McGill University where he obtained a bachelor’s degree with distinction in economics and politics.

The two run a foundation that supports education, health and community development projects in Kenya.

Rita, a lawyer and humanitarian based in Canada, swore a deed of disclaimer releasing her one-fourteenth of Mr Biwott’s share that he gave her in a will he wrote on January 19, 2017, six months before he died.

She is one of the two daughters of Johanna, a woman of Dutch origin, who married Mr Biwott in 1965. Her sister is Rhoda Jakobsoon. Each of Biwott’s seven children was entitled to one-fourteen of his property that was up for distribution.

According to his online profile, Field-Marsham started his first successful business, Advantage Clothing,
at the age of 19 and whilst still an undergraduate at McGill University.

After graduating from McGill he joined Credit Suisse First Boston in New York City as a financial analyst. The bank was one of the key financiers of Biwott’s investments.

From 1993 to 2003, Field Marsham lived in Kenya with his wife, during which time he established and acquired several companies.

His first move was to open Kestrel Capital in 1995. The firm has a market share of 18.5%.

He then set up the Panafrican Group in 1997, importing Komatsu industrial equipment and selling across Africa. The company grew rapidly by supplying equipment to the emerging mining operations across Africa.

Also in 1997, he bought the Kenya Fluorspar Company, a loss-making state-owned company, and entered into a 20-year lease with the government The mine was to become one of the country’s leading foreign currency earners.

According to the Kroll report, he was involved in many of Biwott’s investments, including Yaya Centre, Lima Limited, Pete Aviation and Electronic Ltd as well as a stake in HZ Group of Companies.

Read: Political pressure: Supreme Court a casualty of its own mandate

The report indicates that Biwott and his business associate Gad Zeevi used Credit Suisse in Geneva and Citibank in Zurich to secure a US$12 million credit from Credit Suisse, which gave a guarantee to Citibank Nairobi, the principal lender to HZ and KenolKobil.

In 2006, Field-Marsham returned to Toronto and founded Kestrel Capital Management Capital (KCMC), a company that provides investment consultancy services to his interests outside of Canada.

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