The High Court has temporarily restrained Capital Markets Authority (CMA) from demanding Sh5 million in fines from former National Bank of Kenya (NBK) managing director Munir Ahmed for his alleged involvement in a fraud and accounting scandal at the lender.
Justice Pauline Nyamweya Wednesday suspended the enforcement of the fines pending hearing of an application Mr Munir has filed seeking to restrain CMA from punishing him.
The CMA imposed the fine and banned him from holding any position in a public listed company before asking the Director of Public Prosecutions to conduct further investigations on the crimes and charge a total of eight former officials of the bank.
Mr Munir has sued the regulator over the fines and sanctions the agency imposed on him for his alleged involvement in the scandals.
“In the meantime temporary orders are granted staying the enforcement of the respondent’s decision of April 3, 2018 imposing a financial penalty of Sh5 million against the applicant pending inter parties hearing on July 30, 2018,” ordered Justice Nyamweya.
The CMA asked for more time to respond and the request was granted. The judge directed CMA to file its response by close of business Thursday.
The regulator found that NBK’s former executives set up a deposit mobilisation scheme where commissions were paid to private agents for deposits placed by government agencies in the normal course of business.
Up to 90 per cent of those commissions may have been transferred back to persons related to NBK, the regulator said.
Mr Munir says the CMA’s sanctions were part of a scheme to make him the sacrificial lamb in order to protect other members of the board in the Sh1 billion scam.
The former NBK managing director says in court papers that the CMA’s actions were meant to sacrifice him and to sanitise the lender’s board whose membership includes the Treasury Cabinet Secretary, adding that the CS is also a member of the CMA board.
