Court Affirms CMA’s Mandate to Probe Real People Kenya Executives

Nairobi, Kenya – In a landmark decision, the High Court has dismissed an appeal by four former executives of micro-lender Real People Kenya Limited (RPKL), who sought to block Capital Markets Authority (CMA)-led investigations into alleged misuse of medium-term note (MTN) proceeds and failure to disclose vital information to investors. Justice Benjamin Mwikya Musyoki, presiding at the Milimani Commercial & Tax Division, ruled that the CMA’s Ad Hoc Committee acted firmly within its legal authority, affirming its jurisdiction to proceed. 

Key Details of the Ruling

• Appeal Challenged: The appellants—the former Chief Finance Officer, Chief Executive Officer, Chief Operating Officer, and a board member—argued that the CMA lacked jurisdiction and that the issuer governance code was unenforceable.

• Court’s Rejection: Justice Musyoki rejected these arguments, citing Sections 11 and 13B of the Capital Markets Act, which empower the CMA to investigate licensed entities and their officers, regardless of whether criminal offences may also be involved. 

• No Bias or Delay Found: Allegations of bias and undue delays were also dismissed, with the court emphasizing the necessity of investor protection and market confidence in upholding regulatory authority. 

Implications for the CMA and Corporate Governance

• The decision clears the path for the CMA to continue probing whether Real People Kenya executives misused bond proceeds and withheld critical information from investors.

• RPKL’s rebound performance underscores the gravity of the probe: its net loss was trimmed by 80% to KSh 19 million in 2024, and the firm is seeking fresh capital to stabilize operations. 

• The ruling underscores the importance of regulatory oversight, particularly in micro-lending and corporate governance, enhancing market integrity and investor trust.

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