Banking & Finance
CMA Ordered to Pay Ex-CEO Sh7.5m for Job Loss
Kenya’s Capital Markets Authority must pay Sh7.5m to ex-Sanlam CEO Kennedy Muriithi for blocking his hiring without due process.
The High Court of Kenya has ordered the Capital Markets Authority (CMA) to pay Sh7.5 million (approx. $58,000) to Kennedy Muriithi Riungu, the former Chief Executive Officer of Sanlam Investments Ltd (SIL), for unfairly blocking his appointment to senior roles at Gengis Capital and Mayfair Asset Managers Ltd.
In a decision delivered by Justice Lawrence Mugambi, the court found that the CMA had violated Mr. Muriithi’s constitutional rights by making negative declarations about him without granting him a fair hearing. The judge stated that such conduct undermines principles of justice and fairness, particularly when it causes professional reputational harm.
The case revolved around CMA’s internal concerns regarding Mr. Muriithi’s leadership during his time at Sanlam Investments Ltd, a subsidiary of Sanlam Kenya, one of the largest insurance and asset management firms in East Africa. Though no formal disciplinary action had been concluded against him, CMA allegedly issued unofficial advisories to potential employers, effectively blacklisting him within the financial services industry.
“A regulator must not act arbitrarily. Every professional has a right to be heard before judgment is passed,” ruled Justice Mugambi.
Mr. Muriithi was on the verge of assuming top positions at Gengis Capital and Mayfair Asset Managers when both firms withdrew their offers following CMA’s objections — despite no tribunal or court ruling having declared him unfit.
The court’s award of Sh7.5 million is intended as compensation for reputational damage, emotional distress, and lost income opportunities. The ruling sets a precedent, reminding regulators that oversight must be balanced with respect for due process and individual rights.
The Capital Markets Authority, established under the Capital Markets Act of 1989, is tasked with regulating Kenya’s securities market. Over the years, it has taken a firm stance against corporate misconduct. However, the CMA has also faced legal challenges over alleged procedural overreach — including cases involving listed firms and senior executives.
Sanlam Investments Ltd, formerly known as PineBridge Investments Kenya, was acquired by the South African Sanlam Group in 2016. Under Muriithi’s tenure, SIL managed billions in assets and served pension schemes and high-net-worth clients.
This ruling adds to the ongoing debate over regulator accountability in Kenya’s financial sector.