19 Metropolitan Sacco Bosses Charged in Massive Ksh14.4 Billion Fraud Case

Nineteen current and former officials linked to Metropolitan National Sacco have been arraigned in court over an alleged Ksh 14.4 billion fraud and a series of violations of Kenya’s Sacco regulations tied to the management of the financial cooperative between 2012 and 2021.

According to court documents presented by the prosecution, the accused persons face a principal charge of conspiracy to defraud under Section 317 of the Penal Code.

Prosecutors allege that the officials, together with other individuals not before the court, orchestrated a scheme that led to the loss of Ksh 14,497,677,664 during the nine years.

Those charged 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.

Alleged Irregular Investments

The prosecution further claims that senior officials at the Sacco unlawfully approved the investment of Ksh 1.01 billion 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 governing Sacco operations.

Court filings indicate that the accused persons also violated several provisions of the Sacco Societies Act and prudential guidelines regulating deposit-taking Saccos.

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Among the allegations is failure to maintain the mandatory 15% liquidity ratio required on members’ savings deposits and short-term liabilities.

Prosecutors additionally accuse the officials of failing to establish and maintain a credit committee as required under Sacco regulations, a lapse that allegedly weakened the institution’s credit risk management systems and oversight structures.

Many Cases of Regulatory Infractions

The statement of charges continues to list other regulatory infractions, including improper accounting practices in relation to the true state of affairs at the Sacco.

It is reported that the board failed to keep adequate accounting records as per the legal requirements.

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Other accusations include failure to appoint an internal auditor in accordance with statutory requirements and failure to ensure that loans issued to members were adequately secured through sufficient collateral.

All the accused persons denied the charges when they appeared before the court.

They were each released on a cash bail of Ksh 70,000 pending further directions in the case.

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Former Metropolitan National Sacco management while appearing before court on allegations of fraud. PHOTO/ File