At least five key executives from the ailing Metropolitan National Sacco Ltd have resigned to make room for further investigations following a government audit that exposed significant irregularities.
The resignations happened days after the Sacco’s board was disbanded and a caretaker committee installed last week as a response to scathing results of an inquiry commissioned by Director of Co-operatives, David Obonyo in April.
One teller at the Sacco’s Nakuru county branch made questionable M-Pesa transfers totaling Sh49million, and the institution’s premier loan facility was overstated by more than Sh7billion because of alleged payments to members who didn’t exist.
These are just a few of the unethical practices that were made public.
The audit also established that, despite there being no surplus reserves from which such disbursements are made, the administration of the Sacco, whose members primarily consist of teachers and government employees, had deceived its members by paying out fictitious dividends.
Sources reveal that the members’ savings were used to pay the fictitious dividends.
Additionally, the management was unable to explain why its total assets were reported as Sh28billion even though external auditors had determined that they actually totaled slightly more than Sh14 billion.
The audit also showed that approximately Sh490 million in non-performing loans were unlawfully distributed to its workers, and that Sh176.9million in cash were missing from its Kiambu, Thika, and Kisumu branches.
The audit’s scathing findings were followed by recommendations to dissolve the board, look into the Nakuru branch teller, and hold accountable the executives responsible for the loan book’s forgery.
Additionally, it was advised that all current and past employees who held non-performing loans be looked into and the money recovered.
The auditors also recommended that the Sacco halt all future investments in non-core businesses and shut all loss-making branches.
Eight main branches and 15 satellite ones make up the Sacco, but only Kiambu and Koinange are profitable.
According to Chief Executive of the Sacco Societies Regulatory Authority, Peter Njuguna, the caretaker committee will create a strategy to put the suggestions into action within 90 days commencing Saturday.
