Press Release

CMA commences enforcement hearings on the Imperial Bank bond issue

Nairobi, 14 April 2021: In line with its investor protection mandate, as affirmed by the Supreme Court, the Capital Markets Authority (CMA) commenced its enforcement proceedings against former board members of Imperial Bank Limited (IBL on their failure to provide oversight in the preparation, approval and publication of the Information Memorandum for a Ksh2 billion medium term note issue and on their failure to report the financial statements fraud to CMA and the investing public when it came to their knowledge on 21 September 2015, a day before the bond was allotted to the bondholders.

Only Mr. Christopher Diaz, a former independent and non-executive board member, who served between 1 February 2015 and 13 October 2015, attended the enforcement hearings before an Ad Hoc Committee of the CMA Board to respond to the allegations. Having considered his written and oral submissions the Ad Hoc Committee of the CMA Board did not take any enforcement action against Mr. Diaz who had been newly appointed as an independent and non-executive board member when the bond raising process was already underway.

The other former IBL board members declined to appear before the Ad Hoc committee and filed an appeal at the Capital Markets Tribunal.

The Ad hoc Committee included: Dr. Thomas Kibua, CMA Board Member; John Birech, CMA Board Member; Retired Chief Justice Dr. Willy Mutunga; FCPA Dr. James McFie; FCPA Anne Eriksson; and Patricia Kiwanuka.

Efforts by CMA to undertake the IBL bond enforcement proceedings had been delayed by the former IBL directors who filed court proceedings in 2016 in the High Court and which culminated in Supreme Court Petition no. 29 of 2019 Alnashir Popat & 8 Others vs Capital Markets Authority. In its judgement delivered on 11 December 2020 the Supreme Court directed that that the CMA may proceed with its enforcement proceedings through its delegated authority under Capital Markets Act. In compliance with the Supreme Court ruling the Authority constituted an Ad Hoc Committee on 28 January 2021 to conduct the enforcement proceedings.

IBL applied for the issuance of a Ksh2 billion medium-term note on 30 April 2015, which was approved by CMA on 12 August 2015.  The offer period for the bond opened on 24 August 2015 and closed on 17 September 2015. On 21 September 2015, the IBL management informed the chairman and some directors of IBL that there had allegedly been sustained financial statement fraud since 2006 which had been perpetrated by the late Group Managing Director, Mr. Abdulmalek Janmohamed together with certain senior members of the bank’s management, until his sudden death on 15 September 2015. The disclosure to the IBL chairman and board was made prior to the following crucial dates in the bond issuance process and listing cycle: 22 September 2015 (date of allotment to the bond investors), 28 September 2015 (the settlement date), 6 October, 2015 (before issuance of crediting of notes to CDS accounts and refunds, if any) and 13 October, 2015 (date of Listing and commencement of trading on the Nairobi Securities Exchange). CMA suspended the listing of the bond to commence trading. After a preliminary inquiry CMA cancelled the bond issuance and notified Kenya Deposit Insurance Corporation and the Central Bank of Kenya accordingly.



The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence. The regulatory functions of the Authority as provided by the Act and the regulations include: Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds and the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest. For more information, please contact: Antony Mwangi, Head of Corporate Communications on This email address is being protected from spambots. You need JavaScript enabled to view it.

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