Metropolitan Top Managers Resign in wake of Probe

 After a government audit uncovered significant irregularities, at least five top managers of the struggling Metropolitan National Sacco Ltd resigned to make room for further investigations.

The departures occurred a few days after the sacco's board was dismissed and a temporary committee installed last week as a result of dismal investigation results commissioned by Commissioner of Co-operatives David Obonyo in April.

According to sources, the caretaker committee would replace the managers with temporary office holders while stepping up its preparations for in-depth investigations into the earlier findings, which revealed irregularities like fictitious dividend payments, financial book manipulation, and erroneous lending.

Some of the unethical practices that were revealed include Sh49 million in shady M-Pesa transfers by a single teller at the sacco's Nakuru branch and an overstatement of the institution's prime lending facility by more than Sh7 billion due to alleged disbursements to nonexistent members.

The audit also showed that, despite there being no surplus funds from which such disbursements are made, the administration of the sacco, which draws its members from teachers and government employees, deceived members by making fake dividend payments.

The members' savings were used to pay the fictitious dividends. Additionally, the management was unable to explain why its total assets were reported as Sh28 billion even though external auditors had determined that they actually totaled slightly more than Sh14 billion.

Additionally, the audit showed that Sh490 million in non-performing loans were improperly distributed to its workers, and Sh176.9 million in money were missing from its Kiambu, Thika, and Kisumu branches.

The audit's scathing findings were followed by recommendations to dissolve the board, look into the Nakuru branch teller, and hold accountable the executives responsible for the loan book's forgery.

Additionally, it was advised that all current and past employees who held non-performing loans be looked into and the money recovered.

The auditors also recommended that the sacco halt all future investments in non-core businesses and shut all loss-making branches.

Eight main branches and 15 satellite ones make up the sacco, although only Kiambu and Koinange are lucrative.

According to Peter Njuguna, chief executive of the Sacco Societies Regulatory Authority, who spoke to The Nation last week, the caretaker committee will create a strategy to put the suggestions into action "within 90 days commencing Saturday."