DUBAI/KUWAIT CITY: A Kuwaiti court has fined the chairman of Al-Ahli Bank, the country’s eighth largest bank, 1.5 million dinars ($5.3 million) over alleged insider trading in the bank’s shares.
The Court of First Instance fined Ahmad Yousef Behbehani, a member of a powerful Kuwaiti business family, after a complaint by the Capital Markets Authority, Al-Ahli said in a statement posted on the stock exchange website.
Behbehani said he was not guilty of wrongdoing and would appeal against the ruling to Kuwait’s Court of Appeal, Al-Ahli said.
The CMA said there was a “suspicion that traders conducted transactions in the official stock market based on inside information related to the shares of Al-Ahli Bank of Kuwait,” according to the statement.
Al-Ahli did not give details of the allegations against Behbehani and said the court had not yet disclosed the reasoning behind its judgment.
The bank did not respond to requests for further comment from Reuters nor to efforts to contact Behbehani. Speaking over the telephone, the CMA said it could not immediately comment on the case.
Shares in Al-Ahli, which has a market capitalization of about $2.5 billion, fell 3.5 percent Monday.
A Reuters survey of a dozen international fund managers last month ranked Kuwait lowest among five big Middle Eastern markets for enforcement of regulations against improper or illicit trading.
The CMA, which began operating in 2011, aims to change that and in recent months has been targeting suspected illicit market activity more aggressively, fund managers said.
“The CMA has been active in the last few months and is cracking down on insider and illegitimate trading,” said Fouad Abdul-Rahman al-Hadlaq, deputy general manager at Al-Dar Asset Management. “It has suspended a few big speculators and they can’t buy and sell in the market.”