[2024] KECMT 776 (KLR)

Lindong'a v Capital Markets Authority (Appeal 3 of 2018) [2024] KECMT 776 (KLR) (5 June 2024) (Judgment)

Neutral citation: [2024] KECMT 776 (KLR)

Republic of Kenya

In the Capital Markets Tribunal

Appeal 3 of 2018

Paul Lilan, Chair, Godwin Wangong’u, Constance Gikonyo, P.Wanga & Josephine Eboko, Members

June 5, 2024

Between

Wycluffe Lindong'a

Appellant

and

Capital Markets Authority

Respondent

Judgment

Introduction 1. The Appellant is a former acting Chief Finance Officer (CFO) of National Bank Kenya Limited. By way of a Memorandum of Appeal dated 19 April 2018, the Appellant lodged an appeal against the whole of the enforcement decision rendered by the Respondent’s Board on 3 April 2018. The committee found him culpable and imposed sanctions against him. This followed an inquiry conducted into the affairs of the Bank, by the Capital Markets Authority (the Respondent herein) as a regulator of the capital markets industry. The hearing was conducted by the Board of the Authority of the Respondent.

2. The Board found the Appellant culpable of acting in contravention of regulation B.06 of the 5th schedule of the Capital Markets (securities) (Public Offers, Listing and Disclosure) Regulations 2002 by failing to prepare the interim accounts for the period 30 June 2015 in accordance with the International Financial Reporting Standards (IFRS). Having also acted in contravention of Article 2. 1.3 of the Guidelines on corporate Governance Practices by Public Listed Companies in Kenya, 2002. By failing to supply the board with relevant, accurate and timely information to enable the Board to discharge its duties. Consequently, the Board imposed a financial penalty of Ksh one million against the Appellant.

Factual Background 3. On or about 7 March 2014 the Appellant entered into a contract of employment with the National Bank of Kenya Limited (NBK). He was initially employed as the Business Reporting Manager. Later, through a letter dated 6 April 2015 he was appointed as the Chief Finance Officer in an acting capacity for a period of 2 months. Vide a letter dated 4 August 2015 he was advised to continue acting in the capacity of the Chief Finance Officer until further notice.

4. In January 2016 with the approval of the chief executive officer, the finance department forwarded NBK’s unaudited financial results to the Central Bank of Kenya. On 23 and 24 March 2016 meetings occurred between NBK’s Board, management staff and external auditors (Deloitte & Touche) for the external auditors to present their position to the Board. This happened despite the external auditors not having previously met with the management team.

5. Consequently, on 30 March 2016 at 6pm he received a letter from NBK dated the same day. The letter was ‘notification of a disciplinary hearing and notice to show cause’. It was informing the Appellant to attend a disciplinary hearing on 1 April 2016. He was also sent on compulsory leave. Additionally, he was expected to respond to the accusations of gross misconduct raised in the letter by 31 March 2016 by 1pm. He did provide the response. Subsequently, the NBK on 13 April 2016 called the Appellant and issued him with a letter of summary dismissal.

6. Following an anonymous tip-off into alleged misconduct at NBK, the Respondent begun and undertook its own investigations into the institution. On 7 December 2016 the Respondent issued an information notice and summons for a meeting to the Appellant, requesting him as the former acting CFO to provide information on financial management at NBK. He responded to this notice on 10 December 2016 by having a meeting. He also provided a written response on 20 March 2017.

7. On 22 August 2017 the Respondent issued a notice to show cause to the Appellant. The allegations raised in the NTSC were:i.Willfully preparing and publishing false and misleading financial statements for the NBK by reporting a gain on disposal of assets of Ksh. 847, 920,000 for the quarter ended 30 June to 30 September 2015. ii.Irregularly restructured and rebooked loans without informing and seeking approval of the board of directors, in order to avoid bank obligations to make provisions for non-performing loans amounting to Ksh. 2,595,303,848 and recognizing interest subsequently written off amounting to ksh 680 million contrary to provisions of the Guidelines on corporate governance practices by public listed companies.iii.Potential involvement in the embezzlement of funds through commissioning a deposit mobilization exercise in 2014 and 2015.

8. He responded to the NTSC vide a letter dated 4 September 2017. In the said response the Appellant reiterated the importance of accessing certain documents, from NBK, to aid in his defense. He requested the Respondent to provide those documents. In a letter dated 12 September, the Respondent acknowledged the request for information. In the letter the Authority copied NBK and requested them to provide the documents.

9. By a letter dated 28 September 2017 the Appellant wrote to the Respondent and informed them that NBK had not provided documents and emails he had requested for. On 18 October 2017 the Respondent wrote to the Appellant stating that they were enclosing the response letter from NBK. However, no letter was attached. The Appellant wrote to the Appellant on 23 October 2017 informing them that no letter was enclosed in their previous letter. On 24 October 2017 the Respondent forwarded the letter from NBK dated 3 October 2017.

10. The Respondent required the Appellant to respond to the allegations in the notice to show cause by 31 October 2017. He responded in a letter dated 31 October 2017. The Appellant, through his advocates, by a letter dated 23 November 2017 to the employment and labour relations court requested for the documents from NBK. This was followed by a letter dated 15 January 2018 and a notice to produce dated and filed before the said court on 15 February 2018. The Appellant did not receive the documents from NBK. They relied on the provisions of the Banking act and Prudential Guidelines in justifying their rationale refusing access.

11. In a letter dated 2 January 2018 the Respondent summoned the Appellant to appear before its board on 19 January 2018. After the hearing on 4 April 2018 the Respondent released the finding of its investigations into NBK. On 6 April 2018, the Appellant physically reported to the Respondent’s offices and was given a notification of the enforcement action.

The Appeal and the Response Filed Thereto 12. Aggrieved by the decision, the Appellant lodged this appeal hinged on 6 grounds enumerated in the Memorandum of Appeal dated 19th April 2018 as follows:i.The Respondent erred and misdirected itself in law by declining to provide documents or exercising its authority under the Capital Market Authority Act to order National Bank of Kenya Limited to provide necessary documents for the Appellant’s defence.ii.The Respondent erred and misdirected itself in law and fact by finding that the Appellant allegedly acted in contravention of regulation B.06 of the 5th Schedule of the Capital Markets (securities) (Public Offers, Listing and Disclosure) Regulations 2002 by allegedly failing to prepare interim accounts for the period 30 June 2015 in accordance with the International Financial Reporting Standards.iii.The Respondent erred and misdirected itself in law and fact by finding that the Appellant allegedly acted in contravention of Article 2. 1.3 of the Guidelines on corporate Governance Practices by Public Listed Companies in Kenya, 2002 by failing to supply the board with relevant, accurate and timely information to enable the Board discharge its duties.iv.The Respondent erred and misdirected itself in law and fact by failing to consider the Appellant’s representations regarding the extent of his responsibilities and job description at NBK.v.The Respondent erred and misdirected itself in law and fact by making allegations in their notice to show cause of 22 August 2017 but addressing a different set of facts in their finding thereby reaching a conclusion without according the Appellant any hearing on specific issues.vi.The Respondent erred and misdirected itself in law and fact by considering extraneous matters and misrepresentations in exercising its discretion to impose a financial penalty of Ksh one million.

13. The appeal is opposed through a Statement of Defence dated 14 May 2018 in which the Respondent denies all the grounds of appeal raised.

Submissions And Hearing Of The Appeal 14. The parties filed and exchanged written submissions on their respective positions in the appeal. The Appellant filed submissions dated 6 September,2023 accompanied with a list and bundle of supporting authorities dated 17 January 2024. The Respondent also filed written submissions together with a list and bundle of authorities filed on 16 November 2023. The Appellant also filed supplementary submissions dated 17 January 2024.

The Appellant’s Submissions 15. The Appellant reiterates the factual background as stated in their statement dated 19 April 2018. They aver that based on these facts and grounds raised in the appeal the following issues arise for determination:i.Whether the Appellant’s rights were infringed upon by the Respondent in the trial process;ii.Whether the Respondent’s enforcement decision should be upheld.

16. On the issue whether the Appellant’s rights were infringed upon by the Respondent in the trial process, the Appellant submits that indeed their rights were infringed upon by the Respondent in various ways. This violation of rights is predicated on the Respondent: Declining and failure to order the production of documents necessary for the Appellant’s defence;

Failing to provide evidence of contravention of IFRS standards but reaching a conclusion that the Appellant breached these standards;

Failing to consider that the Appellant was not in charge of loan provisioning;

The Appellant avers that their rights to equal protection under the law, fair administrative action, fair hearing and the right of access to information were grossly infringed upon.

17. The Appellant submits that throughout they have highlighted the fact that his role in finance did not include provisioning for loans. As per NBK’s credit policy, CBK’s prudential and risk management guidelines, provisioning was managed by credit. Accordingly, the Appellant reiterates that he did not at any one time instruct anyone to ‘restructure or rebook’ any loan. Hence, it is extremely unfair to hold him culpable for a role that he never played at all and was expected not to interfere with.

18. The Appellant also avers that whilst the NTSC dated 22 August 2017 alleges he contravened sections 34(b) of the CMA act as read together with regulation B.06 of the 5th schedule of the Capital Markets (securities) (Public Offers, Listing and Disclosure) Regulations 2002, the decision reached introduced new allegations. This is because it refers to the Appellant having failed to prepare accounts for the period 30 June 2015 in accordance with the IFRS. Therefore, this negated ‘any possibility of the Appellant to tender a defence on the same, as he was unaware that he was on trial over the same issues.’

19. On infringement of the right to fair administrative action the Appellant avers this right is enshrined if Article 47 of the Constitution. This provision envisions and demands an expeditious, lawful, reasonable and procedurally fair administrative process. This is supported by the decisions in Alnashir Popat & 8 Others v Capital Markets Authority [2016] eKLR and R v Higher Education Funding Council, ex parte Institute of Dental Surgery [1994] 1 All ER 651 (Q.B.). These cases also reiterate that the tenet of procedural fairness is to be understood from the perspective of justice not only being done but being seen to be done. Hence, the decision maker, in upholding the rights of an accused person, they should act fairly and in a manner that does not give rise to an apprehension of partiality or bias.

20. In elucidating the test of bias the Appellant relies on the case of Jasbir Sing Rai & £ Others v Tarlochan Sing Rai & 4 Others [2013] eKLR and Alnashir Popat & 8 Others v Capital Markets Authority [2016] eKLR and Aly Khan Satchu v Capital Markets Authority [2019] eKLR According to these cases ‘a person facing a decision maker ought not to be left dissatisfied and bearing a sense that justice might not or would not be done.’ Consequently, the Appellant avers that they ought not to have been dissatisfied that justice was not done. This is because through the numerous and continuous requests for production of ‘critical documents’, he had a reasonable and legitimate expectation that the Respondent would act in an impartial manner and assist in availing the documents. However, the Respondent failed to do so. Hence, this impeded the Appellant from mounting a strong defence over the allegations in the NTSC. Further the aspect of bias can be seen through the rendering of an enforcement decision that was based on different provisions than those contained in the NTSC.

21. On the right to a fair hearing the Appellant reiterates the maxim, audi alteram partem; no man shall be condemned unheard and avers that the Respondent did not abide by this maxim. The Appellant contends that the maxim was not applied because the Respondent did not fulfill its duty of continued disclosure. That is, it was the Respondent’s duty, in the role of a quasi-prosecutorial body, to produce or call for production of documents, statements, recordings and or any evidence relied on to enable the Appellant adequately prepare a defence. That is, the prosecution has a duty to disclose to the defence all relevant material. This is as stated in Dennis Edmond Apaa & Others v Ethics and Anti-Corruption Commission (Nrb. Pettition no. 317 of 2012. Further, in the case of Geofrey Muhuzani Anyira v Director of Public Prosecutions & 2 Others it was stated that this duty of disclosure is an ongoing process. However, by the Respondent not playing their duty in calling for the documentation that the Appellant asked for, accordingly their right to a fair hearing was infringed.

22. On the infringement of the right of access to information, the Appellants states that this right is stipulated in article 35 of the Constitution. The fundamental nature of this right was stated in Famy Care Limited v Public Procurement Administrative Review Board & Another as follows:‘The right of access to information is one of the rights that underpin the values of good governance, integrity, transparency and accountability and the other values set out in article 10 of the Constitution. It is based on the understanding that without access to information, the achievement of the higher values of democracy, rule of law, social justice set out in the preamble to the Constitution and article 10 cannot be achieved unless the citizen has access to information.’

23. For a person to enforce the right to access to information, they must establish that they sought the information and access to it was denied as stated in Nairobi Law Monthly Company Ltd v Kenya Electricity Generating Company Ltd. In relation to this case the Appellant thus contends that they were denied the right to access to information. This is because the Capital Market Act grants the Respondent the power to summon for the production of documents requested for by any party. Yet, the Respondent put the Appellant to their defence without complying with their requests for certain documents to be produced. Specifically, these documents are: National Bank credit policy applicable in 2015

National Bank’s procurement policy applicable in 2015

Access to emails up to and including the date of summary dismissal in April 2016

Board minutes for all meetings held in 2015 and 2016

Special audit report by Deloitte & Touche

Detailed report of file from credit used to compute provisions in 2015. The file should indicate how the additional provision of Ksh 2. 6 billion, understatement in suspended interest of Ksh 680 million and Ksh 720 million was arrived.

24. The Appellant submits that the enforcement decision should not be upheld because he proceeded to respond to allegation with ‘scanty and wavering documentation’. Also, despite there being a gag order in the on-going case ELRC Cause no. 2212 of 2016 George Weke Jaba v National Bank of Kenya Limited the Respondent insisted the Appellant ought to provide copies of the documents that he had been prohibited from disclosing.

25. Ultimately, the Appellant submits that upon considering everything it is apparent the Respondent was fronting a position that had already been premeditated and was acting as a front for another party. This can be seen through the disregard for due process, disregard of requests for documentation and disregard for representations made by the Appellant. The publicizing of the resultant decision in the media, before and without any notification to the aggrieved party is also a worrying element that cannot go unnoticed.

26. These actions fail the test of predetermination and the appearance of predetermination.’ This test was set out in R (Lewis) v Redcar and Cleveland BC (2008) EWCA Civ 746. The test is whether a fair minded and informed observer, knowing the facts, would think that there was a real possibility that the decision maker had pre-determined the matter to be decided. Consequently, the final decision made by the Respondent can be said to be a nullity since there was pre-determination. Resultantly, the Appellant urges the Tribunal to find its appeal meritorious and award costs in the cause.

The Respondent’s Submissions 27. Having considered the Appellant’s case the Respondent’s submissions are based on two main grounds: How the Respondent upheld the Appellant’s rights to: Fair administrative action, fair hearing and access to information.

Whether the Appellant breached his fiduciary duty as chief finance officer of NBK?

28. On issue one, the Respondent submits that they did not infringe on any of these rights. First, the Respondent submits that they supplied the Appellant with all information, materials and evidence relied upon in making the decision of taking administrative action as required by section 3(g) of the Fair Administrative Actions Act (FAAA), 2015. This material was initially supplied together with the NTSC dated 22 August 2017. This was forwarded as a catalogue of evidence which the Respondent relied upon in framing the allegations in the NTSC. Further the evidence supplied together with the NTSC related to the substratum of this NTSC as follows:

29. On the issue of misrepresentation of financial statements, the Respondent avers that they provided copies of the financial statements for the germane period; management letter of the external auditor; details of sale transactions whose values affected the financial statements as contained in the Minutes of the Board of the Bank; sale agreements and documents evidencing the scheme to restructure and rebook the loan facilities without the approval of the Board of the bank.

30. With regards to the potential embezzlement of funds, the Respondent supplied various documents which showed involvement of the deposit mobilization agents. These include the agreements between the Bank and the said deposit mobilization scheme, payments to the said deposit mobilization agents in the process.

31. As per section 4(3)(g) of the FAAA it requires an entity to supply information specifically, ‘information, materials and evidence to be relied upon in making the decision or taking the administrative action.’ Accordingly, the Respondent avers that it discharged it duty as required by law. Since attached to the NTSC was a catalogue of documents that they had relied on in crafting the allegations against the Appellant.

32. In addition to discharging its duty in accordance with section 4(3)(g) of the FAAA, they went a step further and requested NBK, in the letter dated 12 September 2017, for more documents that the Appellant had requested for. This was done as per the Appellants request. Nevertheless, NBK responded in a letter dated 3 October 2017 and declined to furnish the documents requested for. NBK based this denial on the basis that the documents were confidential and by virtue of provisions in the Banking act and the CBK prudential guidelines1 they could not share. These are lawful reasons that are recognized under the right to access information.1Section 31(2) Banking act and Guideline 4. 2.5 Central Bank Prudential Guidelines for institutions licensed under the Banking Act.

33. On the issue that there was violation of the right to a FAA because there was a divergence in the provisions quoted in the NTSC and those indicated in the notice of enforcement. The Respondent submits that there was a typographical error by referring to Regulation F.06 instead of B.06 of the Capital Markets (Securities) (Public Offers, Listing and Disclosure) Regulations 2002. Regulation B. 06 requires that all interim reports shall be prepared in accordance with the relevant provisions of the IFRS. Regulation F.06 is total unrelated to the facts in issue since it relates to a conflict-of-interest situation which was not contemplated by the facts set out in the NTSC.

34. The Respondent further submits that the Appellant did not raise this contradiction in any of his written and oral submissions presented to the Authority. Consequently, this presupposes that he understood the facts and the context within which the NTSC allegations were set. Moreover, the Appellant’s written responses refer to Regulation B.06 of the 5th Schedule and proceeds to cite various provisions of the IFRS as contemplated by the Regulations.

35. On the allegations of bias, real or perceived, the Respondent avers, that in the opening statement made by the Chair of the Ad hoc Committee, during the oral hearing the Appellant was explicitly assured of the Respondent’s impartiality in the matter. Additionally, the Respondent states that its actions fail the test of reasonable apprehension of bias since there is no ‘real possibility that a reasonable person, properly informed and viewing the circumstances realistically and practically, could conclude that the Respondent might well be prone to bias. This is the test as stated in Alnashir Popat & 7 Others v Capital Markets Authority [2020] eKLR and Ernest & Young LLP v Capital Markets Authority & Another [2017] eKLR.

36. On the Appellants right to a fair hearing being infringed upon the Respondent submits that they supplied all the documents required to enable the Appellant to defend himself against the allegations made in the NTSC. Additionally, he was given a chance to appear and make oral representations. Hence, these are clear manifestations that the Respondent upheld the Appellant’s right to a fair hearing.

37. On the right to access to information the Respondent submits that they did not hinder or infringe on this right. Instead, they facilitated realization of the right by supplying the Appellant with the relevant documents and went a step further in requesting NBK to provide documents. Nevertheless, NBK based on lawful and valid reason as guaranteed by law declined to supply the documents. Specifically, the reasons given by NBK are valid limitations to the right to access information under section 6 (1)(i) of the Access to Information Act. This position is supported by the case of Nairobi Law Monthly Company Ltd v Kenya Electricity Generating Company & 2 Others [2013] eKLR.

38. On the second issue: Whether the Appellant breached his fiduciary duty as chief finance officer of NBK? The Respondent submits that the Appellant as a key officer of NBK owed a fiduciary duty of care and loyalty to NBK and its shareholders as elucidated in the decision of Gantler v Stephens 965 A.2d, 708-09 (Del.2009). Therefore, by virtue of owing this duty, the Appellant ought to have ensured that the germane unaudited financial results did not have material misstatements. He was supposed to exercise a high standard of care in executing his role in the preparation and publication of the financial statements. Accordingly, the Appellant should have been acting for the benefit of NBK and its shareholders.

39. Further, the Respondent submits that the Appellant also failed in discharging his fiduciary duty of care, skill and loyalty. This duty emanated from the provisions of article 2. 1.3 of the Guidelines on Corporate Governance Practices by Public Listed Companies in Kenya, 2002. These guidelines required the Appellant to supply the board of NBK with relevant, accurate and timely information. Also, regulation B. 06 obliged the Appellant to prepare financial statements in accordance with the required accounting standards.

40. As the CFO in a public listed firm, he was a key officer and not a mere clerical officer who was a passive conduit of the reports and information that other departments submitted to him. During the applicable period the Appellant serving as the CFO had the overall responsibility for the preparation of the Bank’s financial statements for consideration by the Bank’s Board and other relevant key stakeholders. His role as CFO included leading the finance team and driving the finance business performance and strategy. Additionally, he was to represent finance business in all board and board committees and in senior management committees of the bank. The Financial Control Policy (HCP) of NBK stipulated that the CFO had the overall responsibility to maintain a strong and robust GL controls and reconciliation environment. It also stated that the CFO was responsible for ensuring the complete, accurate and reliable GL system and accounting was in place and for maintaining effective and robust control environment to ensure integrity of the books of account of the bank.

41. Consequently, as the CFO he failed to apply an enquiring mind in relation to ‘material’ information’ under regulations in the Capital Markets (Securities) (Public Offers, Listing and Disclosure) Regulations 2002. ‘material information’ includes: ‘a purchase or sale of a significant asset and any other peculiar circumstances that may prevail with respect to the issuer or the relevant industry.’

42. In relation to the facts at hand, the Respondent submits that the sale of the sixteen properties by NBK constituted a significant sale of assets of the issuer (NBK) because of their sheer numbers and most importantly, because of the profit NBK reported as having netted from the disposal i.e. KES 847, 920,000/=

43. Lending is the principal business activity for most commercial banks. The loan portfolio is typically the largest asset and the predominate source of revenue. As such, it is one of the greatest sources of risk to a bank’s safety and stability. Accordingly, as the CFO the Appellant was expected to take a diligent and intelligent interest in the information available to him for preparation of financial statements.

44. Moreover, as an accounting professional, the Appellant is skilled and was required to exercise a reasonable level of due care and diligence as expected of a professional accountant. Hence, the Appellant failed to exercise the duty of reasonable care and skill by failing to confirm the accuracy of the figures of loans, provisions for non-performing loans supplied by the credit department before incorporating them in the financial statement. Additionally, he failed to discharge the duty properly by prematurely recoginsing income from the sale of assets before the signing of agreements and in disregard of IFRS standards.

45. Specifically, the assets that were sold were not reflected in the financial statements as ‘held for sale’ as per IFRS 5 on non-current assets held for sale and discontinued operations. As at June 30 and September 30, 2015 the sale agreements had not been executed and therefore no sale could be recognized as per IAS 16(67). The gain on disposal was reported prematurely and not in line with IAS 18 on recognition of revenue since the assets had not yet been sold at the time the gains were reported on the financial statements.

46. In conclusion, the Respondent submits its actions did not violate any statutory provisions, regulations and the Constitution. That its administrative action met the constitutional threshold of fairness. Consequently, its enforcement action should be upheld in line with the decision in Edwin H Dande v Capital Markets Authority & Cytonn Asset Managers Limited (1st interested part) & Cytonn High Yield Fund (2nd Interested Party). Accordingly, they aver that the Appellant’s appeal is devoid of merit and so should be dismissed with costs to the Respondent.

Issues And Analysis 47. Having considered the case presented by the parties as per the pleadings, the evidence on record as well as the submissions, the Tribunal is of the view that the following are the issues for determination in this appeal.i.Whether the Appellant breached his fiduciary duties as the Chief Financial Officerii.Whether the Appellant’s rights were infringed upon in the administrative processes?iii.Whether the Respondent’s enforcement decision is lawful and should be upheld.

Issue 1: Whether the Appellant breached his fiduciary duties as the Chief Financial Officer 48. Who is a key personnel officer according to Capital Markets Act and was the Appellant key personnel?Section 2 Capital Markets Act states:“key personnel” means a person who manages or controls the activities of a licensed or a regulated person and includes—(a)the chief executive officer, chief financial officer, chief compliance officer, secretary to the Board, chief internal auditor, or any manager of licensed persons; (emphasis ours) and(b)any person who holds a position or discharges responsibilities of any person referred to in paragraph (a).Appropriately, the Appellant was the acting Chief Financial Officer of National Bank of Kenya for the period 6 April 2015 to 13 April 2016. Hence, he falls within the definition of ‘key personnel’.

49. Essentially, “the Chief Financial Officer is generally the second most important officer of a public company. The CFO reports to the CEO. The CFO is not simply a finance or accounting officer; the CFO works closely with the CEO and is “often a key partner to the [CEO] in formulating, evaluating, and implementing strategic choices” for the company.”22O'Hare, Jennifer. "Private Ordering and Improving Information Flow to the Board of Directors: The Duty to Inform Bylaw." University of Richmond Law Review 53 (2022), 557 at 569. See also C. Fritz Foley & Michael Lemm, The Role of the Chief Financial Officer, HARV. BUS. SCH. TECH. NOTE 216-079, at 1 (2016)

50. According to the appointment letter dated 6 April 2015, the duties of the CFO are stated to be,‘heading the finance team and driving the finance business performance and strategy. You will also be representing finance business in all board and board committees, as well as in senior management committees of the bank.’Further according to the Financial Control Policy of NBK as at June 2015 (Board Paper no. BP/147/07/2015; effective date 01 March 2015) the duties of the CFO include the following:‘CFO has overall responsibility to maintain a strong and robust GL controls and reconciliation environment. The CFO is responsible for adopting and implementing this policy and procedures. It is also responsible for ensuring the complete, accurate and reliable GL3 system and accounting is in place. The CFO is also responsible for maintaining effective and robust control environment to ensure integrity of the books of account of [the] bank.’ Pg. 23The GL is a series of accounts where the bank’s financial information is recorded and stored. It serves as the base for all reporting including the profit and loss statement and the balance sheet of the bank. Pg. 1 Financial control policy.

51. Further, in the financial policy at page 3 it is stated that ‘the CFO is also the ‘secondary’ owner of all accounts and costs centers. This means he/she is the second line of defence, for controls over all accounts and costs centers.’ This implies that the CFO has an overseer role over all accounts and cost centers.

Do key personnel such as the CFO owe any fiduciary duties 52. It has been stated that just like directors owe fiduciary duties of care and loyalty, so do key officers. This issue has been reiterated in other decisions as well. Corporate officers and directors stand in a fiduciary relation to the corporation and its stockholders as was as outlined by the court in Guth v. Loft.4 Later, the Delaware Supreme Court in Gantler v. Stephens, 965 A.2d 695 (2009)45 A.2d 503, 510 (Del. 1939).‘That issue — whether or not officers owe fiduciary duties identical to those of directors — has been characterized as a matter of first impression for this Court. In the past, we have implied that officers of Delaware corporations, like directors, owe fiduciary duties of care and loyalty, and that the fiduciary duties of officers are the same as those of directors. We now explicitly so hold.’

53. This duty has been reiterated in other cases such as re Baker Hughes Inc. Merger Litigation C.A. No. 2019-0638-AGB (Del. Ch. Oct. 27, 2020) and re Mindbody, Inc., Stockholders Litigation C. A. 2019-0442-KSJM (Del. Ch. Dec. 9, 2021).

What does the fiduciary duty entail? 54. According to Black’s law dictionary ‘fiduciary’ is defined as: ‘Someone who is required to act for the benefit of another person on all matters within the scope of their relationship; one who owes to another the duties of good faith, loyalty, due care, and disclosure <the corporate officer is a fiduciary to the corporation>.’ Black’s Law Dictionary 11 edition page 770. See BTI 2014 LLC v Sequana SA and others [2022] UKSC 25 at pgs. 929-931 for a discussion on the directors duty to act in the interests of the company.55See also Coetzee, Lindi. "The fiduciary relationship between a company and its directors." Obiter 35, no. 2 (2014): 285-315.

55. Hence from this definition and considering the discussion in the cases listed above, the elements of the fiduciary duty can be summarized as encompassing the following aspects, due care, loyalty, good faith, and disclosure. By extension, the aspect of owing a duty of confidentiality can be implied through the duties of loyalty and good faith. This has also been reiterated in the case of Ahimbiswe Benard v Korir Davis & 2 others (Civil Case 189 of 2018) [2022] KEHC 250 (KLR) at para 11.

56. The duty of care requires directors and officers to exercise reasonable care, skill, and diligence in decision-making and actions. They should ensure that they maintain ongoing awareness of operations and supervise company activities. The duty of loyalty relates to avoiding conflicts of interest with the company. This requires one to disclose potential conflicts and material information to the board and shareholders. Also, one should abstain from using their position for personal gain or self-dealing ventures.

57. Duty of obedience mandates one not to blindly follow orders that contravene the law or company documents such as policy documents and board resolutions. It requires compliance with applicable laws and regulations related to financial reporting and corporate governance. To raise concerns and refuse to participate in activities that violate fiduciary obligations. As well as working towards providing accurate information and avoid misleading practices.

58. The duty of good faith calls upon directors and officers to act in the best interests of the corporation, prioritizing its well-being over personal gain. The duty of confidentiality asks that directors and officers ensure protection of confidential company information or only disclosing it with proper authorisation. Moreover, not to use confidential information for personal gain. The duty of disclosure falls under multiple categories in this context. Transparent disclosure relates to both the duty of loyalty (disclosing conflicts) and the duty of obedience (providing accurate information).66See William M. Lafferty; Lisa A. Schmidt; Donald J. Wolfe Jr., "A Brief Introduction to the Fiduciary Duties of Directors under Delaware Law," Penn State Law Review 116, no. 3 (2012): 837-878 at 841-848.

59. Having considered the key principles underpinning the fiduciary duties that key corporation officers owe to the company and shareholders we can deduce that the Appellant owed these duties to NBK and its shareholders.

60. The Appellant has continuously stated that the corporation, NBK, had a segregated approach in handling business. That is, different departments acted in silos. However, when you read his appointment letter and the Bank’s financial policy it is clear that, as the CFO there was a responsibility to look beyond the silos. The CFO was granted the overall responsibility of overseeing the preparation and publication of financial statements. These financial statements being crucial documents to investors as they provide guidance on the ‘health’ of a company.

Did the Appellant fulfil these duties properly as was required? 61. The Appellant is a skilled accounting professional, hence there is a level of care and diligence that was expected of him. He was expected to utilize his professional knowledge in overseeing the various financial-related aspects of the organisation. The duty of care arose in ensuring that financial information received was thoroughly analysed before inclusion into financial statements. He was expected to maintain an ongoing awareness of operations and supervise/oversee the company’s financial activities including preparation of the financial statements. He also owed the duty of disclosure to ensure that accurate information is provided to the Board for their consideration. The duty of obedience required that as the CFO he ensures compliance with all applicable laws and regulations related to financial reporting and corporate governance.

62. Further, we agree with the Respondent on the fact that the Appellant failed to apply an enquiring mind, proper care and skill in scrutinizing the information relating to the sale of the sixteen properties. This constituted a significant sale of assets and the amount involved had an impact on the balances of the institutions. Accordingly, as the CFO he should have cast a keener eye on the issue.

63. Regarding the loans, this portfolio, as stated by the Respondent, is generally the largest asset for a bank and a key source of revenue. It is also the portfolio that opens a bank to the greatest avenues of risk. Hence, it is important and necessary to closely monitor it. The Appellant, as per his explanation in the oral hearing at the NTSC, stated that the figures for loans, provisioning for non-performing loans was supplied by the credit department and he just incorporated them into the financial statements without cross-checking. This resulted in incorporating the figures indicating that the bank had made a profit from the sale of assets. Yet, this was a premature recognising of income from the sale of assets before the signing of the agreements had occurred. This contrasts with the IFRS and IAS standards. Specifically, IFRS 5, IAS 16(67), IAS 18. Accordingly, the Appellant did not properly fulfill his fiduciary duties.

64. Nevertheless, the Tribunal finds it odd that the main regulator of NBK, the Central Bank of Kenya had not earlier on, in the process of fulfilling its mandate of overseeing and inspection of banks, picked up these issues that were happening at NBK such as the accounting errors. That is, the accounts were not presented correctly according to the appropriate IFRS standards. Hence, from the facts of this case it can be surmised that CBK fell short in fulfilling its mandate. Moreover, in this case it is also curious that no action was taken against the NBK board members. There were the relevant board committees such as the Audit and Risk Committee, that had the duty to oversee the financial management of NBK. They too should have noted the inconsistencies in applying the accounting standards.

Issue 2: Whether the Appellant’s rights were infringed upon in the administrative processes? 65. The Fair Administrative Action Act, 2015 makes it succinctly clear that a person subjected to an administrative action is entitled to an expeditious, efficient, lawful, reasonable and procedurally fair process. The case of Anthony Gross vs Capital Markets Authority CMT Appeal No. 2 of 2022 comprehensively discussed what is required to fulfil this right. Further, consideration of Anthony Gross vs Capital Markets Authority together with the case of Dry Associates Limited V Capital Markets Authority & Another Interested Party Crown Berger (K) LTD [2012] eKLR highlights that the aspect of fairness should be considered in light of the prevailing circumstances of the particular case. Hence, the Tribunal takes this into account as it considers whether the Appellant’s right was infringed upon in the administrative processes undertaken.

66. The Appellant avers that his rights were infringed upon in the administrative processes. The right to a fair administrative action and fair hearing was infringed upon due to various happenings: the manner in which the administrative process and proceedings were conducted and the lack of congruence in the allegations contained in the NTSC and the findings in the NOEA. The Appellant also contends that the Respondent acted in a manner that portrayed bias throughout the administrative process and proceedings. The right of access to information was infringed on for lack of being provided with the documents he requested for. Further, the Respondent failed to exercise its powers under the Capital Markets Act to call for the documents.

67. Did the Respondent fail to provide the documents requested by the Appellant? To answer this question, we pose the following questions: Did the requested documents belong to the Respondent or NBK? Where the documents confidential in nature? Did the Respondent have a legal obligation to compel NBK to produce the documents? Did the Respondent have access to them and refuse to grant them to the Appellant? Did the Respondent try to assist the Appellant access the documents?

68. From reviewing the list of requested documents, it can rightfully be said that some belong to the originator as NBK and others the originator could have been the Appellant. The documents in question were: National Bank credit policy applicable in 2015

National Bank procument policy applicable in 2015

Access to my emails up to and including the date of my summary dismissal in April 2016.

Board minutes for all meetings held in 2015 and 2016

Special audit report by Deloitte and Touche.

Detailed report of file from credit used to compute provisions in 2015. The file should indicate how the additional provision of Ksh. 2. 6 billion, understatement in suspended interest of Ksh 680 million and Ksh 720 million was arrived at.

69. The list of documents did not belong to the Respondent in terms of being the creator or having ownership over them. It can definitely be said they fully belonged to NBK and that NBK is the originator, these are: National Bank credit policy applicable in 2015, National Bank procurement policy applicable in 2015, Board minutes for all meetings held in 2015 and 2016, Special audit report by Deloitte and Touche, and the detailed report of the file from credit used to compute provisions in 2015. As for email communications the inference one can draw is that in various instances the Appellant may have been the originator and hence they belong to him jointly with the bank. This is because the emails most likely show the different communications that the Appellant initiated or responded to in the course of undertaking his duties. Hence, it would not be appropriate to say that they entirely belonged to NBK and that NBK only is the originator of these emails.

70. The Appellant avers that the Respondent is by statute entitled to enter, search, investigate and confiscate any documents held by a party. This implies that the Respondent should have conducted a search and seizure exercise or any other act to gain access to the documents requested for by the Appellant. Section 13A Capital Markets Act states:(1)The chief executive officer may authorise an officer of the rank of Senior Officer or above to inquire into the affairs of a person under this Act.(2)An officer authorised under subsection (1) may, where he or she is satisfied that a person has committed or is reasonably suspected of committing an offence under this Act in Kenya or elsewhere, apply to a magistrate for a warrant to search the premises of that person.(3)The magistrate may issue a warrant authorizing the officer to exercise all or any of the following powers—(a)to enter any premises between sunrise and sunset to search for money, documents or other assets relevant to the inquiry;(b)to seize money, documents or assets which may be necessary for the inquiry or for which the purpose of civil or criminal proceedings and to retain them for as long as they are so required; and(c)to direct any person who has control over such assets to take any action with respect to such assets as the Authority may reasonably require with a view to protecting the assets until the court determines the appropriate course of action.(4)In the interest of bank confidentiality, the powers of the officer in respect of any documents held by a banker shall be limited to making copies or extracts therefrom.

71. Consideration of this section indicates that the search strictly is undertaken when authorisation by way of gaining a search warrant from court first. Hence the assertation by the Appellant that the Respondent had a right to enter, search, investigate and confiscate any documents held by a party, is not true.

Where the documents confidential in nature? 72According to the Oxford Advanced Learner’s Dictionary the word ‘confidential’ is defined as, ‘meant to be kept secret and not told to or shared with other people.’ Similarly, Black’s Law dictionary 11ed states ‘(of information) meant to be kept secret; imparted in confidence.’ Essentially, confidential information includes data, facts, statistics, figures, particulars etc that are supposed not to be known or should be unseen by others. It could also be termed as information that is not publicly available. Considering this definition of confidential, a close examination of the nature of documents requested for indicates that these documents would more appropriately, in this specific context, fall within the scope of internal documents rather than confidential documents. This is so especially considering the context of who was asking for access to the documents.

73. The Appellant had been the acting CFO of the organisation, hence all the documents in the list he would have had access to them. Some of them he may even have played a part in their generation. For example, as the CFO he was supposed to be engaged in the audit process with the external auditors. Generally, in the course of employment the Appellant most likely did encounter the internal documents in the list. Hence, he cannot strictly in the circumstances be considered as being a stranger to the documents in terms of not having encountered them.

74. Despite being internal documents to NBK, closer examination also reveals that these documents were protected under the doctrine of confidentiality. Specifically, through sections 31(2) Banking Act and Guideline 4. 2.5 Central Bank of Kenya Prudential Guidelines.31. (1)The Central Bank or the Cabinet Secretary may publish in whole or in part, at such times and in such manner as it or he thinks fit, any information furnished to it or him under this Act:Provided that the information so furnished shall not be published if it would disclose the financial affairs of any person, unless the consent in writing of that person has first been given.(2)Except as provided in this Act, no person shall disclose or publish any information which comes into his possession as a result of the performance of his duties or responsibilities under this Act and, if he does so, he shall, for the purposes of section 49, be deemed to have contravened the provisions of this Act.Prudential Guideline 4. 2.5 (a) Confidentiality of relations and dealings between the institution and its customers is paramount in maintaining the institution’s reputation. Thus directors, chief executive officers and management must take precaution to protect the confidentiality of customer information and transactions. No member of staff or director should during, or upon and after termination of employment with the institution (except in the proper course of his duty and or with the institution’s written consent) divulge or make use of any secrets, copyright material, or any correspondence, accounts of the institution or its customers. No employee or director shall in any way use information so obtained for financial gain.

75. As stated in Leland I Salano v Intercontinental Hotel [2013]; SBI International Holding Ag (Kenya) v Amos Hadar [2015] eKLR. On the face of it these can be considered valid and legal reasons for NBK declining to share the documents. Nevertheless, it is important that we consider this aspect within the proper and specific context of this case and interpret the application of the Banking Act and Central Bank of Kenya Prudential Guidelines appropriately.

76. As stated above, the documents were not unknown to the Appellant, in various instances he may have been the originator or may have played a part in their creation. Section 31(2) states, ‘Except as provided in this Act, no person shall disclose or publish any information which comes into his possession as a result of the performance of his duties or responsibilities under this Act’. The question is, was the appellant seeking to disclose or publish the information in the requested documents? On the contrary he was seeking to use the documents to help him mount his defence. The allegations in the NTSC may have related to information in these documents. Additionally, the prudential guideline states, ‘No member of staff or director should during, or upon and after termination of employment with the institution (except in the proper course of his duty and or with the institution’s written consent)’. This implies that an exception can be made. That is, a former employee can gain access by being granted written permission.

77. In this case the request for access to information cannot be considered a frivolous affair because it relates to an individual seeking to prove their innocence against charges that they face. The information was also not requested in order to gain a financial advantage. This is what is prohibited in the Prudential Guidelines. Therefore, this can be considered one of the appropriate exceptions to grant written consent to access the documents. Moreover, the Appellant was not requesting for the documents to share them publicly with others, as envisaged in the Banking act and prudential guidelines, on the contrary they were supposed to help him mount his legal defence. Also, if some of the information requested may have contained details revealing accounts of the institution or its customers, the same could have been redacted before sharing it with the Appellant.

78. The Respondent did try to assist the Appellant gain access to the documents. They wrote to NBK and on behalf of the Appellant requested for the documents. But the Respondent did not have the legal authority to compel NBK to produce confidential documents in the circumstances. As even stated by the Appellant, there was a gag order in place in a related matter ELRC Cause no. 2212 of 2016. Suffice it to say that the order or pleadings involved in this case were not given to the Tribunal for us to refer to. Hence, we do not know to what extent the court intervened and nevertheless, a court order must be respected.

79. The Respondent did try to assist the Appellant to access the documents by writing to NBK on his behalf. However, of interest in the communication written by the Respondent to NBK dated 21 September 2017 it is stated,‘the Authority observes that the documents you have requested for under clauses 1, 2, 3 & 5 are not relevant to the allegations which have been made against you in the NTSC (emphasis ours) and wishes to confirm that they are not in our possession.In that regard and by copy of this letter, the Authority hereby requests the National Bank of Kenya to provide you with the following documentation, within seven (7) days of this letter and in any event not later than 15 September 2017 to facilitate you to prepare your response.•National Bank credit policy applicable in 2015•National Bank procument policy applicable in 2015•Access to my emails up to and including the date of my summary dismissal in April 2016. •Special audit report by Deloitte and Touche.’

80. The highlighted statement is most curious. Why would the Respondent include it in communication that is intended to be sent to NBK. At the very least it can be said that the Respondent made a value judgement. In terms of preempting the usefulness of the documents to the Appellant.

81. The Respondent does not have any role in determining what information the Appellant needed to defend himself. On the contrary, considering the three roles that the Respondent plays, these are investigation, prosecution and judge they should shy away from acting in any manner that can be termed as prejudicial to a party. Before a NTSC is issued, the Respondent has to undertake investigation, thereafter they are involved in the prosecution proceedings and finally they are the judge. These three complementary roles of a regulatory authority, such as the Respondent, have been upheld by law in various decisions. (See Alnashir Popat & 8 Others v Capital Markets Authority [2016] eKLR). Nevertheless, it is essential that the regulatory authority acts with utmost fairness in fulfilling these different roles.

82. Thereafter, it can be said that the Respondent acted appropriately in seeking another way to assist the Appellant, after NBK failed to furnish the documents. Accordingly, in a letter dated 18 October 2017 by the Respondent to the Appellant, they stated, ‘kindly demonstrate in your required written submissions what aspect as of the documentation requested were intended to serve to rebut the allegations and/or contradict the evidence as per the notice to show cause. Your response will be taken into consideration in the enforcement proceedings and engagement with National Bank of Kenya’. This leads one to draw the inference that the Respondent was ready and willing to take into account the explanation the Appellant gave regarding the relevance of the un-availed documents in explaining and or refuting the allegations contained in the NTSC.

83. On the other hand, the statement by the Respondent, asking the Appellant to demonstrate how he intended to utilise the documentation requested in rebutting the allegations in the NTSC is important. As stated earlier these documents were internal documents that the Appellant must have interacted with in the course of his employment by NBK. Hence, he was not clueless, but had an idea of their contents. Therefore, it would have been possible to do as the Respondent requested him to. And his response would be taken into consideration in the enforcement proceedings.

84. Further, despite being denied the documents by NBK, apart from requesting the Respondent to assist in acquiring the documents were there other potential avenues that the Appellant could have utilised to access the documents and did they attempt to use these other avenues. Sections 35A (4) and 35A (5) state:(4)The Tribunal shall, upon an appeal made to it in writing by an aggrieved party following a determination by the Authority on any matter relating to this Act, inquire into the matter and make an award thereon, and every award made shall be notified by the Tribunal to the parties concerned and the Authority as the case may be.(5)For the purposes of hearing an appeal, the Tribunal shall have all the powers of the High Court to summon witnesses, to take evidence upon oath or affirmation and to call for the production of books and other documents.

85. Accordingly, the Appellant could have utilised this provision by asking the Tribunal to relook the matter, to step in and call for the production of the documents he had requested for. This could have potentially opened another door to enable the Appellant to access the documents. Nevertheless, this approach was not utilised. Further, neither in the pleadings nor during oral highlighting of the submissions has the Tribunal been made aware how the Appellant intended to rely on the requested documents.

86. Regarding the lack of congruence in the allegations contained in the NTSC and the findings in the NOEA. The Respondent has admitted, in their submissions, that there was a typographical error in the NTSC; regulation F.06 was referred to as B.06. Despite this error the Respondent reiterates there was no discrepancy between the allegations in the NTSC and the NOEA. This is because Regulation F.06 relates to the preparation of financial reports in accordance with the relevant IFRS standards. Moreover, it is apparent from the written response that the Appellant gave, that he understood/inferred the correct provision that the Respondent was referring to. This is because in his response to the allegations he quotes various IFRS rules contemplated by regulation F.06. Moreover, upon careful evaluation of the NTSC we conclude that it is possible to identify the allegation being made from the substratum/content.

87. Regarding the right to a fair hearing, upon evaluation of the relevant documents, the letter for information, NTSC, the transcript for the oral hearing, it is clear the administrative processes and proceedings were conducted in an open and transparent manner.

88. On the allegation of bias, a look at the oral hearing transcript sheds light on this. The Respondent’s officer (James Ndegwa, Chairperson of the Board) states,‘the hearing is intended to supplement the written admissions received by the Authority in order to inform any determination of innocence or calpability with any decision to be made as to the institution of any enforcement or administrative action or otherwise.To be absolutely clear and for avoidance of any doubt I wish to state that the Board has not yet made a determination as to your innocence or culpability in respect of the allegations that have been made against you.’

89. Additionally, by reading the transcript it is clear that the questions posed to the Appellant all revolved around the elements/issues already raised in the NTSC. That is, on the misrepresentation of financial statements and potential embezzlement of funds.

90. Further at the end of the oral hearing, the Appellant stated, ‘mine is to show my appreciation I think the session has been very professional it is not what I expected, … I have to convey my appreciation that this has been very professional.’

91. This implies that the Appellant was content with how the oral hearing had been conducted. The Appellant knew the case against him, the evidence was given, and statements made affecting him. He was given an opportunity to argue and make his presentations.

92. Accordingly, having considered all the processes and the oral proceedings, we do not think that it is possible for a fair-minded and informed observer, knowing the facts, to say that the CMA had pre-determined the matter. The Appellant was accorded a fair hearing as the inquiry was based on the NTSC and supporting evidence supplied by the Respondent.

93. The Fair Administrative Action Act was enacted pursuant to Article 47 of the Constitution. As held in the case of Capital Markets Authority v Ciano & Another [2023] KECA 581 (KLR), section 4 FAA echoes Article 47 of the Constitution and reiterates the entitlement of every person to an administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair.

94. In the case of Anthony Gross v Capital Markets Authority CMT Appeal No. 2 of 2022, the issue of fair administrative action was extensively covered. Specifically, paragraphs 52-56 expounded on the importance of FAA, the requirements to ensure FAA is achieved and appropriate application of the right. This discussion reiterates the need to fulfill the requirements set out in Section 4(3) and (4) of the Fair Administrative Action Act, 2015. “(3)Where an administrative action is likely to adversely affect the rights or fundamental freedoms of any person, the administrator shall give the person affected by the decision-a.prior and adequate notice of the nature and reasons for the proposed administrative action;b.an opportunity to be heard and to make representations in that regard;c.notice of a right to a review or internal appeal against an administrative decision, where applicable;d.a statement of reasons pursuant to section 6;e.notice of the right to legal representation, where applicable;f.notice of the right to cross-examine or where applicable; org.information, materials and evidence to be relied upon in making the decision or taking the administrative action.Accordingly, in the present matter were these requirements met? Consideration of the facts and the discussion in the preceding paragraphs indicates that Respondent has worked towards ensuring the proceedings fulfilled the requirements for a FAA.

95. The fact pattern indicate that the Appellant was given prior and adequate notice of the nature and reasons for the proposed administrative action. Likewise, the information, materials and evidence to be relied upon in making the decision and taking the administrative action was supplied to the Appellant. This is through the NTSC and the catalogue of documents attached to it. The Appellant was given an opportunity to be heard and to make representations. This was done in writing and orally. The Appellant was informed of their right to appeal the decision of the Respondent. The NTSC and NOEA provided reasons for the allegations and the decision that the Respondent made against the Appellant.

Issue 3: Whether the Respondent’s enforcement decision is lawful and should be upheld. 96. Section 11(3)cc of the Capital Markets Act empowers the Respondent to impose sanctions for breach of the provisions of the Act. These include the levying of financial penalties, proportional to the gravity or severity of the breach. As well as doing all such other acts as may be incidental or conducive to the attainment of the objectives of the Authority or the exercise of its powers under the Act.

97. Additionally, Section 25A of the Capital Markets Act, empowers the Respondent to impose sanctions or levy financial penalties on (a) the licenced person; (b) issuer of securities exchanges or; (c) an employee of an issuer, or approved person or a director of an issuer or a licenced person. Specifically, section 25A (a) (vi) (vi) provides for the levying of financial penalties not exceeding ten million shillings. Accordingly, considering the legal provisions set out above, the penalty imposed on the Appellant is lawful and done within the powers of the Respondent. Accordingly, and considering the preceding discussions, the Tribunal is of the view that the enforcement decision is lawful.

Disposition 98. This Tribunal by unanimous decision finds that the appeal is without merit, and it is hereby dismissed, and we make the following orders: -(a)The enforcement decision of the ad hoc committee on 3 April 2018 is upheld.(b)Each party shall bear its own costs of the Appeal.

DATED AND DELIVERED AT NAIROBI THIS 5TH DAY OF JUNE 2024. 1 . HON. PAUL LILAN, MBS - (CHAIRMAN2. HON. GODWIN WANGONG’U - (MEMBER)3. HON. DR. CONSTANCE GIKONYO, PHD - (MEMBER)4 . HON. PAUL WANGA - MEMBER)5. HON. JOSEPHINE EBOKO - (MEMBER)