A director of publicly-listed CIC Insurance Group Limited has been incriminated in insider trading at the giant insurance firm.
In a shocking case of conflict of interest, Cornelius Odhiambo Ashira who is a director at CIC Insurance Group Limited has been accused of incorporating an insurance brokerage firm by proxy and unethically using his position in the board to privately profiteer from CIC Life Assurance.
Ashira established Quest Insurance Brokers mid last year and placed his brother as the principal shareholder before proceeding to dishonestly channel commissions worth millions of shillings from CIC Life Assurance as he continues to serve as a director in the group.
The shrewd Ashira is a veteran of the SACCO industry and is very well networked within CIC Insurance Group Limited. Sources told us he has continued to leverage on his influence to pull strings and avoid internal probing.
Consequently, market regulator Insurance Regulatory Authority (IRA) has been prompted to probe Cornelius Ashira with a view to putting an end to his unethical practices and punishing his deliberate failure to disclose his apparent conflict of interest. This should be done with a view to banning his involvement in insurance business and if possible prosecuting him on corporate fraud charges.
IRA is the regulator of all insurance companies in Kenya, with a mandate to regulate, supervise and develop the insurance industry in Kenya.
Also put on the trail of Ashira are forensic and enforcement investigators from the Capital Markets Authorities who are empowered by law to investigate and deal with cases of suspected market abuse and insider trading as well as investigate the affairs of listed companies suspected of engaging in suspicious or fraudulent transactions.
A six month undercover probe by our investigation desk revealed that Ashira has accumulated millions of shillings in immoral profits mostly though irregularly marked up commissions.
We further established that Ashira was being paid commisions at a rate beyond the regulated 8%, in some cases upto 26%.
As a result, after only six months of trading, Quest Insurance Brokers now rank amongst the top five brokerage firms in Kenya by turnover.
Documents in our possession show Quest Brokers made a whooping Sh34 million in their first three months of operation.
To make matters worse, a deeper analysis of commissions paid to Quest Brokers reveal that contrary to industry practice which requires brokerage firm to market and acquire business, Ashira’s brokerage firm dishonestly benefited through transfer of business that it did not facilitate but rather grabbed all independent large group life schemes from CIC Life and transferred them to his firm, brazen case of theft by director.
In Kenya, reporting conflict of interest for publicly listed companies is required by law and failing to make full disclosure amounts to partaking in criminal activity.
There are now real fears that CIC Assurance, indeed the CIC group, risk losing public confidence due the selfish and fraudulent activities of Cornelius Odhiambo Ashira, real concern for stakeholders within the giant CIC Insurance Group Limited.
It remains to be seen if authorities will be moving in to press charges against Cornelius Odhiambo Ashira and put an end to this unfair business practice.