The Stima Investment Cooperative Society Board Dissolved

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The Commissioner of Co-operatives has disbanded the entire board of the giant Stima Investment Co-operative Sacco after a forensic audit revealed massive fraud at the society, which has exposed members to losses exceeding half-a-billion shillings.

Last week, Nairobi County Chief Officer in charge of Tourism and Co-operatives, Machira Gichohi wrote to the society saying the commissioner of cooperatives had dissolved the board.

Elections were ordered to be held in 15 days.

“The entire board of directors of Stima Investment Cooperative Society has been dissolved with effect from February 18, 2019,” Gichohi said.

The detectives from Directorate of Criminal Investigation have been requested to investigate alleged misappropriations of society’s funds.

The cooperative’s website, the board comprised of former Energy Regulatory Commission Director General Joseph Ng’ang’a(chairman), Elizabeth Mbebe (Vice-chairperson), Phenny Abisae (National Treasurer), Preston Mutangili (Secretary),Hogla Wanjohi (member),Andrew Kamamia (member) and Maurice Waweru (member).

The audit by financial consulting firm Deloitte reveals how Stima Investment lost money through multiple irregular land purchases across the country in which officials bought occupied land without conducting any due diligence or site visits, failed to settle transactions after putting down initial deposits and in other cases collected funds from members even before the preliminary purchase agreements were signed.

The inquiry report written by Hesbon Kiura and Charles Mugwika says that the board locked out representatives from Stima Sacco and Kenya Electricity Generating Company.

“The society by-laws provide that Stima Sacco should be represented in the committee of Stima Investment and the Stima Sacco CEO should be an ex-officio in all committee meetings of Stima Investment,” the report says.

“We hereby order that Stima Sacco and KenGen elect one of their members to represent them in the Stima Investment to cater for their interest in the society immediately,” the report adds.

The report notes that the board members held frequent meetings which they would be pay themselves sitting allowances several meetings and also cited the huge millage claims.

“We noted that in a day, one could attend three meetings under different names. Such frequency of meetings makes them lose their meaning. They carry hefty claims, terms mileage and allowances are just a cash cow or conduit for the meagre society funds. We recommend a shift from practice forthwith,” notes the report.

It also says that the board members went on a retreat and instead of using pool transport, they each used separate means only for them to claim millage.

The report has recommended that for the society to bounce back to profitability and regain public confidence, suspended CEO Nelson Irungu should be reinstated immediately noting that he has the required qualifications, skills and competence.

The report also recommends dissolving the three-member supervisory committee of Emmans Otadoh (Chairman), Wairimu Njehia (member)and Benjamin Komen (member). It calls for a fresh election.

“The elections of the committee should be held immediately through secret ballot method as stipulated in the society by-laws to avoid intimidation and rigging,” the report concludes.

 

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