Imperial Bank and Chase Bank have cleaned out workers’ pension to the tune of Sh1 billion following their collapse.
A report by the Auditor General for the year 2017 forced National Social Security Fund (NSSF) bosses to acknowledge they sunk Sh996 million in bonds and fixed deposits that are no longer recoverable.
This is about two months’ worth of contributions for the 2.5 million members with monthly deductions of Sh200.
Auditor General Edward Ouko has in his latest report explained the extent of likely losses which he blamed on poor management by private wealth management firms.
He wants the four fund managers who were paid Sh182 million last year dropped and new ones selected.
“The fund does not appear to have received value for money…,” Ouko says in his new audit report. Several companies have lost billion in Chase Bank and Imperial Bank including CIC Insurance, Liberty Insurance and Sanlam have been forced to write off the debts.
In a report, the Capital Markets Authority also indicated that some of the key investment managers lost Sh4.2 billion last year alone over the suspension of Chase Bank, Imperial Bank bonds and the poor operating environment.
Equity Investment Bank lost Sh1.7 billion, while Britam Investment Funds under its management fell from Sh9.3 billion to Sh8 billion.
Ghengis Capital, which was affiliated to Chase Bank at the time of the lender’s collapse, booked a 22 per cent drop in assets, which fell from Sh700 million to Sh545 million.
NSSF fund managers were only able to collect Sh26 million from the failed banks, just about an eighth of the amount they invested. Ouko said the losses could have been averted had the investments been insured, as is practice in his advisory to kick out the firms.
“It is recommended that the fund managers be changed on expiry of their contracts,” reads the report that would next be presented to the National Assembly recently.
Sh667 million was lent to the banks in bonds while Sh330 million was held in term deposits with varying maturity dates that are all past.
Old Mutual, Britam, Stanlib and GenAfrica are the firms contracted to manage and invest the workers’ savings worth about Sh210 billion.