Part One: Stima Sacco rocked in financial fraud, cover-up claims ahead of AGM

Barely six months after marking 50 years of existence in October last year which painted a rosy picture on its operations and growing membership to a tune of over 200,000, Stima DT Sacco Society Limited is grappling with claims of financial fraud and alleged cover-ups ahead of the 51st Annual General Meeting (AGM) scheduled for Friday, 28th February 2025, at 9am at the College of Insurance Auditorium, South C, Nairobi.

In our Part One of a Two Part investigative series dubbed ‘Stima Sacco rocked in financial fraud, cover-up claims ahead of AGM’ by The Informer Media Group, we delve inside Stima Sacco amid recent government stance to stump out the rot ailing the saccos and cooperatives in the country.

Our investigations have revealed that unscrupulous Stima Sacco employees and rogue members alongside other external players, some former Sacco staff members are said to be running a clandestine fraud syndicate unabated including issuing loans to members using forged pay slips.

To cover-up the mess, some of the implicated staff members are said to have been silently transferred to other branches with the protection of some of the Sacco board members.

The revelations come against the backdrop of an order by the government through the Co-operatives and MSMEs Cabinet Secretary Wycliffe Oparanya to have a forensic audit conduct on all Saccos to safeguard members’ savings from financial mismanagement.

Oparanya issued the directive after a Sh13.3 billion scandal at Kenya Union of Savings & Credit Cooperatives (KUSCCO) exposed weaknesses in the sector’s financial oversight.

He said the audit also seeks to bring corrupt officials to justice, noting that several Saccos across the country were in financial distress, a situation that prompted the government’s decision to take action.

“The government is implementing decisive measures to address financial mismanagement. Individuals found culpable will be held accountable through the available legal and administrative framework…Similar measures will be taken against any cooperative leader who misappropriates or mismanages members’ funds. This will no longer be tolerated,” he said.

He also announced plans to enhance the powers of the Sacco Societies Regulatory Authority (Sasra) to strengthen supervision and accountability in the cooperative sector.

“We intend to give Sacco Societies Regulatory Authority (Sasra) more powers to carry out supervisory duties to ensure the cooperative movement is strengthened,” Oparanya said.

Stima Sacco draws its membership mainly from parastatals under the Energy Ministry such the Kenya Power and Lighting Company (KPLC), Energy and Petroleum Regulation Authority (EPRA), Kenya Electricity Generating Company (KenGen), Kenya Electricity Transmission Company (Ketraco), Rural Electrification and Renewable Energy Corporation (Rerec) and Geothermal Development Company (GDC) among others.

By the time of publishing this story, Stima Sacco national chairperson Joseph Siror who also doubles as the Kenya Power Managing Director, Stima Sacco Chief Executive Officer (CEO) Gamaliel Hassan and Board Secretary Osman Khatolwa had not responded to queries sent to them last week.

According to available information, Stima Sacco reported a pre-tax profit of about Ksh 1.4 billion in 2023.

This profit was accompanied by a 21 per cent growth in revenue reaching Ksh 8.96 billion and a 10 per cent increase in their asset base to Ksh 59.1 billion.

Over the same period Sacco paid out a dividend worth Ksh 1.44 billion and grew its assets to Ksh 59.1billion.

The Sacco, which has about 211,000 members, has 12 branches across the country with financial assets standing at Ksh61 billion as at last year.

“Stima DT Sacco will hold its 51st Annual General Meeting on Friday, 28th February 2025, at 9:00AM at the College of Insurance Auditorium, South C, Nairobi. The Agenda includes the presentation of financial reports, approval of the 2025/2026 budget, elections, and key policy amendments.” Stima Sacco said through a public notice published on February 13, 2025.

In our Part Two series, we bring to you a blow by blow account of the extent of the rot at the half-century-old financial institution.