The Capital Markets Tribunal has thrown a spanner in the works of the Capital Markets Authority's (CMA) attempt to consolidate two separate appeals filed by Kakuzi officials accused of self-dealing.
In a ruling issued yesterday, the tribunal chaired by Paul Lilan rejected the CMA's request, arguing that despite the cases arising from similar transactions, the procedures followed by the CMA differed, necessitating separate appeals.
This decision comes after the CMA separately summoned the Kakuzi Managing Director, Christopher Flowers, and later issued show-cause letters to eight other directors.
The CMA sought to merge both appeals, arguing it would save time and costs.
However, the tribunal disagreed, stating that consolidating the appeals would "muddle up issues" and that procedural differences were crucial to both cases.
They further rejected the CMA's argument that success in one appeal would translate to the other, stating that each case stood on its own merit.
Adding another layer to the drama, the tribunal also denied participation to two minority shareholders, Steven Kimani and Daniel Kimotho.
While acknowledging their shareholder status (although evidence wasn't presented), the tribunal found they lacked a demonstrably identifiable legal interest in the proceedings and wouldn't suffer any prejudice by not being involved.
The crux of the case revolves around accusations against Kakuzi officials, including Nicholas Ng'ang'a, Graham Mclean, and Andrew Njoroge, of approving millions of shillings in payments to companies they formed without disclosing their interests.
The CMA alleges contracts were awarded for technical and management support services without proper disclosure, with payments exceeding Sh320 million between 2018 and 2021.
This ruling effectively splits the Kakuzi case into two distinct legal battles, each with its own procedural nuances and potential outcomes.
While the tribunal acknowledged the underlying issue of corporate governance being common to both cases, they deemed the separate appeals necessary to ensure a fair and thorough examination of the accusations.
The coming months will likely see both the CMA and the accused Kakuzi officials vigorously pursue their respective appeals, with the tribunal's decision setting the stage for two potentially precedent-setting legal battles in Kenya's corporate governance landscape.