A Kuwaiti court has fined the chairman of Al Ahli Bank, the country's eighth largest bank by market capitalisation, 1.5 million dinars ($5.3 million) over alleged insider trading in the bank's shares.

The Court of First Instance fined Ahmed Yousef Behbehani, a member of a powerful Kuwaiti business family, after a complaint by the Capital Markets Authority (CMA), Al Ahli said in a statement posted on the stock exchange website.

Behbehani said he was not guilty of wrongdoing and will 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 bank's statement.

Al Ahli did not give details of the allegations against Behbehani and said the court had not yet disclosed the reasoning behind its judgement.

The bank did not respond to requests for further comment from Reuters or to efforts to contact Behbehani. Contacted by telephone, the CMA said it could not immediately comment on the case.

Shares in Al Ahli, which has a market capitalisation of about $2.5 billion, fell 3.5 percent on Monday.

A Reuters survey of a dozen international fund managers last month found they 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 activity in the market 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 Abdulrahman Alhadlaq, 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." - Reuters