NAIROBI, Kenya- In a move raising eyebrows across Kenya’s financial sector, the Central Bank of Kenya (CBK) has called on the Capital Markets Authority (CMA) to investigate unusual trading activities involving the National Social Security Fund (NSSF).
The trades, flagged by CBK, took place between May and July 2024 and involved key players such as Humphrey Wachira Gichuru and Pergamon Investment Bank.
The crux of CBK’s concern lies in the irregular patterns identified in NSSF’s bond trading activities.
According to a letter from CBK’s Director for Financial Markets, David Luusa, the NSSF was caught up in transactions where bonds were purchased at prices significantly higher than the market average, only to be sold shortly after at much lower rates.
In some instances, the NSSF repurchased the same bonds at even higher prices after selling them at a loss.
This back-and-forth trading behavior is not only puzzling but also suggests potential market manipulation or insider dealings.
The central bank has urged the market regulator to scrutinize the conduct of the involved parties and report back on any corrective measures taken.
This request highlights CBK’s commitment to maintaining transparency and integrity in Kenya’s financial markets, particularly when public funds, such as those managed by the NSSF, are involved.
“The purpose of this letter is to request the CMA to review the conduct of the above-mentioned parties and share the actions taken with the Central Bank of Kenya,” Luusa wrote, underscoring the gravity of the situation.
This incident isn’t just a blip on the radar; it raises serious questions about the governance and oversight of public investment funds.
If left unchecked, such irregularities could undermine investor confidence in Kenya’s financial markets. The CBK’s swift response signals a proactive approach to safeguarding the market from potential manipulation and ensuring that all players adhere to fair trading practices.
As the CMA delves into this case, all eyes will be on the outcomes of the investigation and the subsequent actions taken.
