In a well-organized syndicate that involved some of its former and present senior staff and board directors, the 47-year-old Metropolitan National Sacco lost KSh 12 billion through theft and embezzlement, an audit has revealed.
The alleged fraud and theft at the Sacco first came to light three years ago following complaints from its members, who were unable to make any withdrawals nor access any loan facilities.
- An audit team appointed in April 2022 unearthed theft on a massive scale by some Metropolitan National Sacco staff, who are yet to be prosecuted nor the sums and assets allegedly stolen, recovered.
- According to reports by the team appointed two years ago by the Commissioner for Co-operatives Development David Obonyo, the Sacco lost KSh 49 million illegally withdrawn by a teller at the Society’s Nakuru branch.
- The audit also found that some KSh 7 billion was loaned out to fake members.
Directors of the Society are also said to have recommended payment of dividends and rebates, using members’ cash deposits and not from surpluses. The Society’s balance sheet size was also overblown by a massive KSh 14 billion to KSh 28 billion.
The Society is said to have also fraudulently disbursed loans amounting to KSh 490 million to its employees while cash amounting to KSh 176.9 million belonging to Kisumu, Thika, and Kiambu branches, allegedly disappeared without a trace.
Cases of theft of members’ cash at Metropolitan National Sacco involved forgeries such as falsification of documents, signatures, and fraudulent funds deductions.
- Metropolitan National, which draws its membership from teachers and civil servants was registered on February 10, 1977, as Kiambu Teachers Sacco.
- It later rebranded to Metropolitan Teachers Sacco until July 2, 2009, when it again changed the name to Metropolitan National Sacco Society Limited.
- Metropolitan Sacco has since opened its common bond to attract all salaried people, businesses, commissions, and minors.
To protect members from further losses at Metropolitan, the Senate Committee on Trade and Tourism recently asked the Teachers Service Commission (TSC) to stop remitting cash to Metropolitan Sacco from members who had pulled out of it.
The committee, headed by Okiya Omtatah, has indicated its intention to summon CS for Cooperatives Simon Chelugui and TSC boss Nancy Macharia to shed light on the disappearance of teachers’ money at Metropolitan National Sacco.
The Sacco has eight branches and 15 satellite offices but only the two-Kiambu and Nairobi, are profitable. Other branches include Kisumu, Nakuru, Thika, Kajiado, Limuru, and Bungoma with 12 service centers in Mombasa, Eldoret, Machakos, Migori, Nairobi, Siaya, Kitale, Namanga, Loitoktok, Emali, Ngong and Matuu.
The Bigger Picture
The Sacco Societies Fraud Investigation (SSFIU), a wing of Sacco Societies Regulatory Authority (SASRA), has warned SACCOs to be vigilant against theft by insiders- a criminal activity that is perpetrated by a Sacco’s staff.
The Sacco industry regulator is now advising these financial outfits to carry out thorough due diligence on the staff they recruit since most reported fraud and theft cases, including cybercrime, involve Sacco staff.
SACCOs have also been told that while purchasing loans from other financial institutions, they should secure credit scores from CRBs of those facilities to safeguard the SACCO from purchasing poor credit score borrowers.