After several denials by its top management and board of directors, an external audit by the office of Commissioner for Cooperatives has unearthed severe liquidity problems at the Metropolitan National Sacco.
The problem at this 45-year-old deposit-taking Sacco first came to light two years ago following complaints from its members, who were unable to make any withdrawals nor access any loan facilities.
A section of the board and management at the Sacco blamed falsehoods allegedly spread in the media for the financial strains at Metropolitan.
Other managers, while acknowledging that there were indeed serious liquidity challenges at the Society, said services of debt collectors had been procured to recover unpaid loans and urged members not to withdraw from the Sacco.
Problems at the Sacco also attracted the attention of the then Kenya National Union of Teachers Secretary General Wilson Sossion, who asked that Metropolitan Sacco be put under scrutiny, to safeguard the savings of its members-the bulk of who are in the teaching profession.
The chicken has finally come to roost with a probe by David Obonyo, Commissioner for Cooperatives, replacing the Society’s board with an interim committee that will take charge for three months as further investigations are conducted.
According to a report by the team appointed in April this year to probe alleged irregularities at Metropolitan National Sacco, huge sums amounting to KSh 49 million were illegally withdrawn by a teller in the Nakuru branch, some Ksh 7 billion given out to fake members, dividends paid using members’ cash and overstatement of the Society’s balance sheet size by KSh 14 billion to KSh 28 billion.
The external auditors also found that non-performing loans, amounting to some KSh 490 million, were fraudulently disbursed to employees of the Sacco. Further, Kisumu, Thika and Kiambu branches could not explain how funds totalling some KSh 176.9 million disappeared from their coffers.
Established in 1977 at Kiambu Teachers Sacco, Metropolitan Sacco has since opened its common bond to attract all salaried people, businesses, commissions and minors.
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 centres in Mombasa, Eldoret, Machakos, Migori, Nairobi, Siaya, Kitale, Namanga, Loitoktok, Emali, Ngong and Matuu.
The Society is said to have borrowed over Ksh 3.143 billion from Ksh 653 million over the past 10 years, severely crippling its financial health.
It is still unclear how the unethical practices at Metropolitan National went unnoticed for long, under the watchful eye of the regulators who have rosy supervisory reports. This is until members raised complaints.
State officers involved in the external audit of the society, appointed by commissioner Mr Obonyo, included Javel Murira-Director of Co-operative Audit, Dr David Gitonga Kahuthu Manager-in-charge of Regulations, Kennedy Otachi-Principal Co-operative Officer and Daniel Mue Mwatu-senior compliance officer.
