Cooperatives and MSMEs Cabinet Secretary Simon Chelugui has dismissed the Kenya Union of Savings and Credit Union (KUSCCO) board of management.
In a statement on Monday May 6, CS Chelugui said there were large cash withdrawals from the union's bank accounts amounting to Sh5,466,016,687 between February 2013 and April 2024, which the board could not account for.
He noted that there were suspicious cash transfers to the company secretary of KUSCCO Housing, loans to senior staff and directors of KUSCCO totaling Sh61.5 million, double purchase of land (LR 23269/35) worth Sh80,546,000 and suspicious cash transfers to insurance agencies amounting to Sh434,160,379.
The Cooperatives CS also highlighted cash transfers from KUSCCO accounts to their staff accounts, an irregular account opened for KUSASA under KUSCCO CIF, and inter-subsidiary cash transfers.
“In light of these egregious lapses, a consultative meeting convened on 25th April 2024, with representatives from depositors reached a unanimous consensus on the future of the Union.
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“It was concluded that the current board of directors has failed in its duty to steer the union effectively. Consequently, in the interest of ensuring accountability and restoring confidence, the Ministry has taken decisive action on this matter,” CS Chelugui stated.
He also mentioned that the KUSCCO executive committee had declared bonuses, dividends and interest despite losses over the years.
The dismissal of the KUSCCO executive comes months after the Ministry of Cooperatives appointed Grant Thornton to conduct a thorough audit of the union's financial affairs.
KUSCCO is registered as the umbrella body for Savings and Credit Cooperatives (Saccos) in Kenya and is responsible for advocacy and representation of Kenyan Saccos.
It has a membership of over 4168 Saccos in the country and holds deposits of Sh18.9 billion.
