Regulator begins recovery of missing Sh550m at Afya Sacco

Sasra Chief Executive Peter Njuguna seeks to streamline Afya Sacco Society Ltd. [File, Standard] The regulator has moved to recover part of more than Sh500 million, said to have been misappropriated by the management of Afya Sacco Society Ltd. The money was siphoned through excess allowances associated with Sacco activities, either through cash or cheques, with some of the transactions not featuring in its records. The Sacco Societies Regulatory Authority (Sasra), in a damning letter, shows Sh90 million was withdrawn from the Sacco's back office (Bosa) but remained unaccounted for in the transactions register. These amounts were withdrawn in batches of Sh10 million between January 2024 and July 2024 through cheques. There is also Sh100 million, which Sasra says was withdrawn from the Sacco's front office (Fosa) between January 2024 and July 2024. This amount, which Sasra says remained unaccounted for in the Sacco's transactions register, was also withdrawn in batches of Sh10 million through cheques. Further, the authority also flagged Sh360.51 million, which was paid out in cash with no evidence of accounting. This was done between February 2022 and August 2024. The letter dated October 31, 2024, provides details on why the Sacco has been in financial turmoil in the recent past, with the last Annual Delegates Meeting turning chaotic as members demanded the removal of top management. Members, who are largely workers in the public health sector, lamented not being able to access loans or withdraw their savings after years of banking with the Sacco. This is while the management argued non-remittance by county governments as part of the reason behind their liquidity challenges. However, the letter, drafted by Sasra Chief Executive Peter Njuguna, now paints a clearer picture of the rot that has been draining life from the almost 60-year-old Sacco. The letter addressed to the chairperson and board of directors of the Sacco also directed the closure of the cash office, as the entity was put under administrative and heightened supervision by the authority, accompanied by cease-and-desist orders. "That the board of directors and the management of the Sacco society, and every officer thereof shall cause the immediate closure of the cash office operated at the Sacco society; and shall henceforth cease and desist from undertaking any further cash transactions in the Sacco society in accordance with the authority's statutory advisory issued vide Inspection Report dated January 2022," the Sasra CEO directs in the letter. According to the details in the letter, the Sh360.51 million in question included Sh5.3 million paid out as the board's transport allowance in 2022, which grew to Sh13.9 million in 2023 and Sh6.8 million for just half of the year ended August 2024. The letter then directs that the Sacco's chief executive and the internal auditor prepare a report within three months from the date the letter was drafted, providing an account of the Sh360.51 million. "That, the board of directors and management of the Sacco society shall immediately commence the recovery of all unprocedural and irregular payments made to any person who served and /or is serving as a member of the board of directors at a fixed monthly rate of Sh67,515," says Njuguna. He adds that if one is or has served as a member of the supervisory committee, the recovery will be at a fixed monthly rate of Sh52,500 from February 2022 to the date the letter was drafted. Sasra says the actions taken on the Sacco are as a result of the entity operating contrary to the provisions of the Sacco Societies Act and relevant Regulations. "The authority has determined that there are reasonable, and probable grounds to believe that the deposit taking Sacco business of the Sacco society has continuously and/or severally been conducted and /or caused to be conducted in a manner that is detrimental to, and not being in the best interests of the Sacco members," the authority says.

Regulator begins recovery of missing Sh550m at Afya Sacco

Get Full Access for Ksh299/Week.

Related Topics

Similar Articles

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS

Similar Articles

CS Kabogo: Digital economy now established, focus shifts to governance and accountability

How Ruto's aggression over fuel prices with EAC neighbours strains ties

Ruto opts for electric cars to escape high fuel prices

Kenya, Netherlands moot corridor to link EAC and Europe

DIGGER JOBS

Digger Motors

Digger Real Estate

Regulator begins recovery of missing Sh550m at Afya Sacco

Get Full Access for Ksh299/Week.

Related Topics

Similar Articles

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS