Nineteen current and former officials of Metropolitan National Sacco have been arraigned in court over an alleged KSh14.4 billion fraud and a series of violations of Kenya’s Sacco regulations linked to the management of the financial institution between 2012 and 2021.
According to court documents, the accused persons are facing a principal charge of conspiracy to defraud contrary to Section 317 of the Penal Code. Prosecutors allege that the officials, together with others who were not presented before the court, conspired to defraud the Sacco of KSh14,497,677,664 during the nine-year period.
Those charged are Christopher Kahuno Karanja, Samuel Ndungu Muiruri, John Kimani Munyaka, James Kamau Ngugi, Patrick K. Kagwi, Francis Kamau Nganga, Benson Mwangi Nganga, Paul Kaberere, Geofrey Wamae, Duncan Chege, Francis Wachiuru Mbae, George Mwihia, Daniel Lee Kamau, Joseph Gachunga Mwaura, Boniface Muthama, Rosemary Chege, Edward Duncan, Lucy N. Kabiru and James M. Ngomo.
The prosecution further alleges that senior officials irregularly approved the investment of KSh1.01 billion belonging to the Sacco in the acquisition of land in Kitengela, Machakos County. Investigators argue that the transaction amounted to an investment in a non-core business venture, contrary to provisions of the Co-operative Societies Act.
The accused persons are also facing several additional counts under the Sacco Societies Act and related prudential regulations. Among the allegations is failure to maintain the mandatory 15 per cent liquidity ratio required on members’ savings deposits and short-term liabilities.
Prosecutors further claim that the officials failed to establish and operationalize a credit committee as stipulated under Sacco prudential guidelines, thereby weakening the institution’s credit risk management systems.
Court documents also accuse the officials of failing to maintain proper books of accounts reflecting a true and fair financial position of the Sacco, neglecting to appoint an internal auditor as required by law, and failing to ensure that loans advanced to members were adequately secured with collateral.
All the accused persons denied the charges before the court and were each released on a cash bail of KSh70,000 pending the hearing and determination of the case.
