19 Metropolitan National Sacco officials charged over alleged Ksh.14 billion fraud

Nineteen current and former officials of Metropolitan National Sacco have been charged in court over an alleged Ksh.14.4 billion fraud scheme and multiple violations of Kenya’s Sacco laws tied to the management of the society between 2012 and 2021.

According to the charge sheet presented in court, the accused persons face the main count of conspiracy to defraud contrary to Section 317 of the Penal Code, with prosecutors alleging that they jointly conspired with others not before court to defraud the Sacco of KSh14,497,677,664 over the nine-year period.

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

The prosecution further accuses senior officials of unlawfully authorizing the investment of KSh1.01 billion belonging to the Sacco in the purchase of land in Kitengela, Machakos County, arguing that the transaction amounted to investment in a non-core business and was contrary to the Co-operative Societies Act.

The officials are also facing several other charges under the Sacco Societies Act and related regulations, including failure to maintain the legally required 15 per cent liquidity ratio on members’ savings deposits and short-term liabilities.

In addition, prosecutors allege that the officials failed to establish and maintain a credit committee as required under prudential regulations, compromising the Sacco’s credit risk management framework.

The charge sheet also cites failure to maintain proper books of accounts showing a true and fair financial position of the Sacco, failure to appoint an internal auditor as required by law, and failure to ensure loans issued to members were fully secured by adequate collateral.