Nineteen current and former executives of Metropolitan National Sacco have been brought before the court on allegations of a KSh14.4 billion fraud and multiple contraventions of Kenya’s Sacco regulations concerning the administration of the financial entity from 2012 to 2021.
Court documents reveal that the defendants are confronted with a primary charge of conspiracy to defraud under Section 317 of the Penal Code. The prosecution claims that these individuals, along with others not present in court, collaborated to misappropriate KSh14,497,677,664 from the Sacco throughout the nine-year timeframe.
The individuals facing charges include 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 contends that senior management improperly sanctioned the investment of KSh1.01 billion belonging to the Sacco in land acquisition in Kitengela, Machakos County. Investigators assert that this constituted an investment in a non-core business activity, which violates the Co-operative Societies Act provisions.
The defendants are also facing multiple additional charges under the Sacco Societies Act and associated prudential regulations. One of the accusations is the failure to maintain the mandatory 15 percent liquidity ratio required on members’ savings deposits and short-term liabilities.
Prosecutors further assert that the officials neglected to establish and implement a credit committee as required by Sacco prudential guidelines, consequently compromising the institution’s credit risk management systems.
Court documents additionally accuse the officials of not maintaining adequate accounting records that accurately reflect the Sacco’s true and fair financial position, failing to appoint an internal auditor as legally mandated, and not guaranteeing that loans provided to members were sufficiently secured with collateral.
All defendants pleaded not guilty to the charges in court and were each granted release on a cash bail of KSh70,000 while awaiting the case’s hearing and determination.