Home NEWS Local News Chelugui kicks out KUSCCO management over questionable financial dealings

Chelugui kicks out KUSCCO management over questionable financial dealings

The Cooperatives CS has since appointed audit firm Grant Thornton to conduct a thorough examination of the union's financial affairs.

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Cabinet Secretary for Cooperatives and Micro, Small, and Medium Enterprises (MSMEs) Simon Chelugui has announced the dismissal of the Kenya Union of Savings and Credit Union (KUSCCO) Board of Directors and managers over alleged maladministration.

The CS the under-fire leadership had failed in its duty to steer the union effectively. He said the decision to kick out the management had been made in the interest of ensuring accountability and restoring confidence.

“In response to these findings, immediate administrative measures were taken, including the dismissal of implicated top managers and administrators, to facilitate a comprehensive audit of the union’s operations and financial records,” said Chelugui at a press briefing

According to the minister, a probe recently conducted on the SACCOs umbrella body revealed significant discrepancies in the management and operations.

“Preliminary findings indicate systemic deficiencies in the management of resources, including…high cash withdrawals out of character with expected operations – Kshs 5,466,016,687 between February 2013 and April 2024,” he said

besides this, the CS noted that the probe had revealed suspicious cash transfers to the Company Secretary, suspicious cash transfer of funds to Insurance Agencies, questionable cash transfers from KUSCCO accounts to their staff accounts, and suspect loans to senior KUSCCO staff and directors.

Chelugui further indicated that despite incurring losses, the union proceeded to declare bonuses, dividends, and interest a practice that cannot be condoned.

“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,” the CS announced

In light of the latest developments, the CS further directed the Commissioner for Cooperative Development to appoint an interim board to run the affairs of the SACCOs union.

This interim board will be tasked with the responsibility of overseeing the transformation and rehabilitation of the union, with the full support of a dedicated technical team.

Chelugui said his ministry remains resolute in its commitment to fostering a culture of transparency, accountability, and ethical conduct within the cooperative sector.

“We will spare no effort in safeguarding the interests of cooperative members and promoting sustainable development across all facets of cooperative enterprise,” he said

The Cooperatives CS has since appointed audit firm Grant Thornton to conduct a thorough examination of the union’s financial affairs.

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