The Commissioner of Co-operatives David Obonyo has ordered investigations into the operations of financially troubled Metropolitan National Sacco Limited.
The probe order comes as the Sacco, which draws its membership from teachers and civil servants, is grappling with financial challenges amid a massive pile-up of dud loans.
“Whereas on my own accord have ordered for an inquiry into the affairs of Metropolitan National Sacco Limited and whereas I am of the opinion that an inquiry be carried into the by-laws; working and financial conditions; and the conduct of present or past directors and management of Metropolitan National Sacco Limited,” the commissioner said in a gazette notice yesterday.
Obonyo authorised Javel M. Murira, director of Co-operative Audit, David Gitonga Kahuthu, manager, of regulations, Kennedy Otachi, principal cooperative officer, and Daniel Mue Mwatu, senior compliance officer, to hold an inquiry within 15 days.
Sacco Societies Regulatory Authority (Sasra) chief executive officer Peter Njuguna said they are conducting the inquest into the affairs of the Sacco to understand the business and review a turnaround plan.
He said while regular inspections and audits provide a view of the health of the Sacco, the law provides the regulator with the option of conducting an inquest that will provide a deep dive into the company's operations.
“We are simply reviewing what the management has done, they have had a turnaround strategy that has taken too long, and changed their CEO but still they have not been able to recover. So we are trying to understand how we can aid the process,” Mr Njuguna said yesterday.
Metropolitan, which had deposits of Sh7.6 billion by December 2020 has total assets of Sh16.7 billion making it the sixth-largest sacco according to Sasra reports.
Its non-performing loans amounted to Sh9.3 billion, forcing it to provide for Sh6.7 billion as insurance during its annual general meeting last week.
During the AGM sacco members also approved a raft of changes aimed at cushioning it from the risk of collapse.
In other changes, it was decided that Sacco goes after serial defaulters, cut costs, and overhaul its governance structure to meet legal requirements and reflect the diversity of its membership.
It was also decided that members with big loans contribute more amid the revelation that there have been cases of people with loans of up to Sh2 million making monthly contributions as low as Sh3,000.
It was further agreed at the AGM that the Sacco gets a new board and chairperson after members approved proposals to have board members who retire from active service automatically retire from the board.
Chairperson, vice-chairperson, treasurer, and secretary-general are also to serve for only two terms of three years each. Other changes include the introduction of a delegates’ system to devolve representation closer to the people.
