With the war the Director of Public Prosecutions (DPP), the Directorate of Criminal Investigations (DCI) and the Ethics and Anti-Corruption Commission (EACC) are waging on corrupt officials in state owned agencies, it looks like many of these will be soon sent home packing or worse still, charged in a court for abuse of office.
The Auditor-General of the Republic of Kenya, Edward Ouko has now joined in on the fight and wants the National Social Security Fund (NSSF) to kick out four of the five fund managers it has contracted to oversee retirees’ savings for making risky investment decisions that led to loss of nearly Ksh. 1 billion.
Mr Ouko, in the NSSF’s financial statement for the year ended June 2017 published Thursday, wants GenAfrica, Britam, Old Mutual and Stanlib locked out for exposing workers to possible loss of Ksh. 969.72 million in collapsed Imperial and Chase banks.
The four fund managers have been accused of recklessly investing a cumulative Ksh. 996.4 million comprised of Ksh. 666.90 million in corporate bonds and Ksh. 329.5 million in fixed deposits.
Mr Ouko said that only Sh26.68 million of the cash invested between September and October 2015, and which was not disclosed in previous financial statements, had been recovered as at June 2017.
He further argued that the NSSF did not receive value for the Ksh. 181.52 million it paid out to the fund managers in consultancy fees during the year ended June 2017.
“It’s also not clear whether the deposits were insured,”he said.
He also revealed that the three-year contracts of the current fund managers were renewed in the year 2014/15 (July 2014-June 2018) despite the recommendation that the fund managers be changed on expiry of their contracts.
According to the statement, Old Mutual Asset Managers injected Ksh. 417.7 million of the NSSF funds into the two beleaguered lenders followed by Britam with Ksh. 391 million. GenAfrica, majority-owned by New York-based Kuramo Capital, bet Ksh. 218.5 million of the workers’ savings in Imperial and Chase, while Stanlib sunk Ksh. 100 million in Chase’s corporate bond.
“The fund (NSSF) has, however, indicated the likelihood of recovering most of the investments after CBK (Central Bank of Kenya) carried out an expression of interest and received initial bids to sell Imperial Bank to pay off depositors, while Chase Bank was re-opened and reportedly acquired by SBM Kenya…,” he added.
Big depositors with the collapsed banks are however expected to recover only a portion of their cash since a big chunk of the funds were lost through theft buy managers and directors of the failed lenders.
Do you think the NSSF managers will be forced to step down or will we just accept and move on?