Business Corruption

Audit Report by Deloitte Reveal Massive theft at Stima Sacco

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Emerging facts indicate that fraudulent activities at Stima are being orchestrated and ruthlessly executed by rogue managers and a section of the Central Management Committee (CMC and section of the Board of Directors). At stake is the Ksh. 35 billion shillings in member savings and assets acquired over the years since the formation of the Sacco in the 1970s

The giant Stima Savings and Credit Cooperative Society is slowly being strangled to death by rampant corruption, fraud and outright looting perpetrated by senior officials, The Weekly Vision Onlinecan reveal. The government has been forced to intervene, with the ministry of Cooperatives calling for the creation of a special investigative unit to deal with fraud cases within the Sacco Movement, just like the Fraud Investigative Department (BFID) for banks.

The illicit activities at the Sacco have also attracted the attention of the Directorate of Criminal Investigations (DCI, the Ethics and Anti-Corruption Commission (EACC) among other top government investigative agencies involved in financial crimes, who have moved in to carry out intense investigations.

“These are critical issues that we have persistently raised with the CEO Hassan Anyanzwa and chairperson Madam Miano as employees and contributors to the Sacco, fully aware that we have members spread across the country with billions of shillings in savings whose main goal is to make our lives better”

Emerging facts indicate that fraudulent activities at Stima are being orchestrated and ruthlessly executed by rogue managers and a section of the Central Management Committee (CMC and section of the Board of Directors). At stake is the Ksh. 35 billion shillings in member savings and assets acquired over the years since the formation of the Sacco in the 1970s.

Stima Sacco (CEO) Gamaliel Hassan Alukwe Anyanzwa

The Chief Executive Officer (CEO) Gamaliel Hassan Alukwe Anyanzwa and his top managers, Julius Irungu-Risk Management and Compliance, Joseph Rono -Internal Audit, Jafford Mwendwa- Finance and Henry Musau, Chief of Supplies and Procurements have been under intense pressure to produce documents, reportedly hidden and hand them over to the DCI officer for the forensic investigations to be completed. Others are Board chairman Rebecca Miano, Vice-chair Bernard Ngugi, Secretary Osman Khatolwa and Treasurer John Mudany are men and women whose job is to safeguard members’ interests but that does not seem to be the case here, greed and personal interests have taken over.

According to sources, it all started when managers resorted to over-pricing megaprojects intending to amass massive commissions at the expense of the Sacco. The source cannot be named because of his job and personal security said: “These was followed by procurements including tenders awarded to friends and family, contracts, supplies, bloated administrative expenses like travel, meetings, accommodation, meals and a host of many other things in deals involving hundreds of millions of shillings which then translates into billions annually.”

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The illicit misdeeds were recently exposed when the Commissioner of Cooperatives ordered the sacking of the entire board’s section concerned with land acquisitions in which the Sacco lost half a billion shillings in fraudulent land acquisition deals

He went on: “These are critical issues that we have persistently raised with the CEO Hassan Anyanzwa and chairperson Madam Miano as employees and contributors to the Sacco, fully aware that we have members spread across the country with billions of shillings in savings whose main goal is to make our lives better.” Most of our members are employees at the Ministry of Energy and related State Corporations like Ken-Gen, the Rural Electrification and Renewable Energy (REREC), Kenya Power and Lighting (KPLC) and Geothermal Development Authority.

The fraud, part of which is documented in court filings, reveals widespread mismanagement of funds at Stima Investment, an arm of the 13,565-member Stima Sacco Society. To date, the Sacco has nine branches in Nairobi City’s (Parklands/Ngara where it is headquartered), Mombasa, Kisumu, Nakuru, Olkaria near Naivasha, Eldoret, Nairobi CBD, Embu, and Kawi Centre the energy ministry headquarters in South C.

The most critical question top managers, board of directors at Stima Sacco have failed to answer – is why they are putting at risk multi-billion shillings investments that belong to members? Why are they betraying the trust and responsibility bestowed on them by members? The illicit misdeeds were recently exposed when the Commissioner of Cooperatives ordered the sacking of the entire board’s section concerned with land acquisitions in which the Sacco lost half a billion shillings in fraudulent land acquisition deals. A recent audit by financial consulting firm Deloitte revealed the rot at Stima Sacco. The Commissioner of Co-operatives ordered for the sackings of managers at Stima Land Investment Co-operative Sacco after a forensic audit revealed massive frauds that exposed members to losses exceeding Khs. 500 million shillings. It is feared that much money running into billions of shillings has been lost in the past few years. 

The Weekly Vision Online attempts at getting a comment from Mr Jack Kulova-Manager, Corporate Communications were fruitless as our questions through WhatsApp went unanswered. An audit by Deloitte reveals how Stima Investments officials bought an already occupied piece of land even without conducting due diligence probes or site visits, failed to settle transactions after putting down initial deposits and in other cases collected funds from members even before the preliminary purchase agreements were signed. The result was that on February 19th, 2021 the Cooperatives Commissioner dissolved the seven-member Stima Sacco Land Investments board, prompting them to file a suit in court seeking to reverse the decision

According to an insider, this was just a tiny tip of the financial scum that is plaguing the Sacco because vast other areas have not been exposed because of the excessive secrecy involved in the whole corrupt mess the Sacco. That move according to insiders shows just how the stakes involved are in hundreds of millions of shillings belonging to innocent unsuspecting members.


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