KUSCCO Officials Charged in Major Financial Mismanagement Scandal

Date: 14th February 2025

Nairobi, Kenya – In a significant development that has shaken the cooperative sector in Kenya, four officials from the Kenya Union of Savings and Credit Cooperative Society Ltd (KUSCCO) have been arrested and charged with financial mismanagement involving billions of shillings. The Directorate of Criminal Investigations (DCI) announced the arrests following extensive investigations into the financial irregularities at KUSCCO, which serves as an umbrella body for 247 deposit-taking Savings and Credit Co-operatives (Saccos) across the country.

The accused, identified as George Magutu Mwangi, Mercy Muthoni Njeru, George Ochola Owino, and Jackline Pauline Atieno Omolo, were arraigned at the Milimani Law Courts facing multiple charges. These include Conspiracy to Defraud Contrary to Section 317 of the Penal Code, Stealing by Directors or Officers of Companies under Section 282 of the Penal Code, and Making False Documents as outlined in Sections 347(a) and 349 of the Penal Code. The quartet will remain in custody pending the determination of their bail terms, set for Tuesday, 18th February 2025.

In addition to the arrests, the former Managing Director of KUSCCO, George Otieno Ototo, has been summoned to appear in court on the same day for plea taking. This development underscores the depth of the investigation, targeting both current and former officials of the organization.

The scandal at KUSCCO came to light after a forensic audit by PricewaterhouseCoopers revealed gross mismanagement, financial irregularities, and possible criminal activities. According to the Cabinet Secretary for MSMEs Development, the audit uncovered non-performing loans amounting to Sh3.7 billion, overstated profits of nearly Sh798 million over the last six years, irregular commissions totaling Sh2.7 billion, and mismanagement of the central finance fund to the tune of Sh1.3 billion. The mismanagement has led to a suspension of KUSCCO’s financial activities, with its role now limited to advocacy and capacity building until public confidence is restored.

DCI Kenya has stated that their detectives are committed to a thorough investigation to ensure all perpetrators of this financial malfeasance are brought to justice. This case is part of a broader effort to curb corruption in Kenya, which according to investigators, involves sums equivalent to 10% of the nation’s income, posing a threat to economic stability.

The public and the cooperative sector are watching closely as these proceedings unfold, hoping for a resolution that will restore integrity and trust in one of Kenya’s pivotal financial institutions. The government’s firm stance on this issue signals a strong commitment to fighting corruption and financial misconduct within key sectors of the economy.

For more updates on this story, stay tuned to our blog site.

Note: The details provided in this story are based on the provided X post and related web results, reflecting the current situation as of February 14, 2025.