Blow to county as bid to change MUWASCO bank signatories hit snag

[Photo: Courtesy]

An attempt by the county government to change signatories of bank accounts held by Murang’a Water and Sanitation Company (Muwasco) has failed.

County Executive for Finance David Waweru wrote a letter dated March 28, 2019 to Equity Bank, Murang’a branch manager Benson Kinuthia.

In the letter, Mr Waweru indicated that the county wanted to change the signatories, following the enactment of the new Murang’a County Water and Sanitation Act, 2019.

County control

Waweru argued that under the new Act, Muwasco had become an entity owned by the county, whose assets, including cash held in bank accounts, were under the control of the county.

He said the water company was now subject to the Public Finance Management Act, 2012, and as such, the county was mandated by the law to instruct how funds in Muwasco's bank accounts should be used.

“We give instructions as follows. That effective immediately, the existing signing mandate of those accounts is hereby reviewed to include Edwin Kimuyu, the Chief Officer in-charge of Revenue and Financial Operations, as a mandatory signatory," Waweru's letter reads.

In a swift rejoinder, Mr Kinuthia, through a letter dated April 5, declined the county's request and termed it unlawful. 

Equity Bank informed the county administration that under the law, Muwasco was an independent corporate entity, and any arrangements regarding its bank transactions could only be certified by its board of directors.   

Equity Bank explained that if the county wanted to have a say in the running of Muwasco's bank accounts, a resolution to that effect must be passed by Muwasco's board.

“An approval is needed for the county to have a say in the running of Muwasco's bank arrangements. Such approval is to be communicated to the bank through a resolution of Muwasco's board,” reads Kinuthia's letter.

Water Services regulatory Board CEO Robert Gakubia said it was wrong for the county to interfere with Muwasco.

The letter by Equity Bank to the county was also copied to the Auditor General, the County Secretary and the bank supervisory department at the Central Bank of Kenya.