NAIROBI, Kenya, Nov 19 – The Capital Markets Authority (CMA) has imposed fines and multi-year market bans on former senior officials of Chase Bank Kenya Limited (in liquidation), concluding a long-running enforcement process linked to the bank’s 2015 medium-term note (MTN) programme and the use of proceeds.
The regulator said the sanctions targeting former Chairperson Zafrullah Khan, former General Manager Finance Makarios Agumbi, and former General Manager Corporate Assets James Mwaura follow an extensive inquiry into whether breaches of capital markets laws contributed to the lender’s collapse in 2016.
“The CMA Board Ad Hoc Committee established that Mr. Khan, being a CBKL Board Chairperson, failed to exercise effective oversight over the management of CBKL, leading to preparation and publication of false and misleading financial statements disclosed in the published Information Memorandum (IM).”
“Mr. Khan failed to cause disclosure of material information of his bonus payment in a supplementary IM, since the IM had already been published, and was conflicted in chairing and participating in the approval of his own bonus without declaring the conflict.”
Khan was fined Sh5 million and barred from serving as director or key personnel of any licensed capital-markets entity for 10 years after a CMA Board Ad Hoc Committee found he failed to exercise oversight in the preparation of false and misleading financial statements published in the MTN’s Information Memorandum (IM).
The Committee also noted he did not disclose material information regarding his bonus payment and chaired discussions on his own remuneration without declaring a conflict of interest.
Agumbi was fined Sh3.5 million and disqualified from similar roles for five years for facilitating the preparation of misleading 2014 financial statements and unprocedurally paying Khan’s bonus in a lump sum, contrary to a board resolution.
Mwaura received a Sh2.5 million penalty and a two-year disqualification after the Committee found he enabled the publication of misstated financial information, including the misclassification and non-disclosure of related-party loans under Musharakah Investments, and took part in irregular bonus payment processes.
Additionally, all three were directed to undergo corporate governance training before being eligible for any future appointments within the capital markets sector.
CMA had approved Chase Bank’s plan to issue a Sh10 billion medium-term bond in 2015, with the first tranche raising Sh4.8 billion and listing on the Nairobi Securities Exchange on June 22, 2015.
Less than a year later, on April 7, 2016, the Central Bank of Kenya placed the lender under receivership and appointed the Kenya Deposit Insurance Corporation (KDIC), triggering the suspension of the bond’s trading the next day.
Following the bank’s collapse, the regulator launched an inquiry into potential regulatory breaches, flagging issues including false financial disclosures, failure to reveal material information and conflict of interest.
Twelve individuals received Notices to Show Cause, nine of whom appeared before the Ad Hoc Committee.
Khan, Agumbi and Mwaura moved to the Capital Markets Tribunal in 2022 to halt the enforcement hearings, but a ruling delivered on February 2, 2024 directed them to participate in the CMA proceedings.
After concluding the hearings on November 17, 2025, the Ad Hoc Committee found the trio liable for breaching capital markets regulations relating to the MTN issuance and use of funds.
The enforcement marks one of CMA’s most consequential actions involving a failed bank in the regulator’s push to tighten accountability around disclosures in Kenya’s corporate bond market.
