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Current and former officials and management staff of Metropolitan National Sacco, mainly teachers, are staring at possible prosecution after an audit by the regulatory authority unearthed massive embezzlement of funds leading to a loss of at least Sh12 billion.

Commissioner of Co-operatives has, besides kicking out current board of directors, appointed a three-mouth caretaker committee “to further probe by detectives” against them and their predecessors who served from 2010 over alleged theft through withdraws, cash transfers as well as irregular loans that were defaulted,

The saga could also lift the lid on the conspiracy between rogue Sacco officers and unscrupulous auditors and officials at Sacco Societies Regulatory Authority (Sasra) after it emerged that the Sacco has been declaring false financial numbers to paint a rosy picture while it has been on a major down fall.

According to audit by Sasra read out to members during a meeting in Kiambu by David Kahuthu, the manager, licensing and regulation and Daniel Mwatu, a senior compliance officers at Sasra, the Sacco management has been manipulating systems to cover-up the mess, cooking accounts books which would be used to declare dividends and rebate. Director of Co-operatives Nairobi County, Delphine Aremo said: “You will be held accountable. The actions you do will be followed. You can run but you cannot hide. It’s very painful that members tightened their belts. Denied themselves, and then someone takes advantage of that to have a luxurious life.”

“Because all those people are alive, we are saying all is not lost because they will be followed so that whatever they have taken from this organisation returns to the owner.”

Board of directors

Among those fingered for failure in the duties leading to the losses and recommended for action are board of directors, heads of departments who served between 2010 and 2021 led by former CEO Francis Ng’an’ga, his predecessor Benson Mwangi, heads of finance, internal audit, compliance, ICT and credit.

Further, auditors have been recommended for actions over accusations of professional negligence by giving false reports on the financial position of the Sacco, which besides the cover-ups, misled retired President Uhuru Kenyatta to award a former  director a head of state commendation in 2012”.

“Someone would manipulate the records to say that the loans are being paid while it was not being paid. We established that the loan book was not doing well. What else was being done to cover-up the lapses, was manipulation of loans,” Mwatu told the members.

He added that perusal of books of accounts shows that the society has not been itemising the correct income in its accounts, and consequently, the income reported in the financial statement was deliberately overstated to mislead members of the public that the business was on a good trajectory. He added: “With the actual income of Sh6.8 billion, and the actual expenses of Sh18.8 billion over the last 24 years, the society has made cumulative losses amounting to Sh12.008 billion. What we have reported as growing and a very good Sacco over the years has not been the position.”

Teachers sacco

The Sacco was registered on February 10, 1977 by like-minded teachers in Kiambu who registered as Kiambu Teachers Sacco, and then instructed their employer-Teachers Service Commission (TSC)  to channel their salaries through it with a view to helping it grow.

The entity was later re-branded to Metropolitan Teachers Sacco and later to Metropolitan National Sacco to accommodate non-teaching members and today it has over 100, 000 members.