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Kencom Sacco Members Cry Foul

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In a growing economy such as Kenya’s, it’s normal to believe that
anything associated with one of the leading banks in the region will do
well financially, that’s not the case with KCB Bank Kenya ltd’s Kencom
Sacco that was started back in July 1994.

Of course Kencom Sacco has mebbers drawn from other two banks namely,
National Bank of Kenya (NBK) and Cooperative Bank of Kenya.

It is said that members wishes to have loan facilities without
providing tangible security as is a requirement by banks that gave birth
to KCB’s in-house Sacco. 

It’s shocking to note that Kencom is one Sacco that clearly defines
what mismanagement and corruption is all about. The graft and impunity
in Kencom Sacco is on another level. Members money are stuck inside the
Sacco, no dividends have been paid for a long time now neither do they
approve loans.  For instance, you can save as high as close to one
million but when you apply for say sh1 million or slightly above, you
will wait even beyond one year as the loan remain unprocessed.

Kencom Sacco takes more than a half a year to pay off members who no
longer work with KCB. Members of the Sacco believes that whatever is
happening at Kencom Sacco is a collusion amongst Kencom Sacco managers,
their counterparts at KCB, NBK and Coop banks, and senior officers from
Sacco Societies Regulatory Authority (SASRA). Any attempts to inquire
about this foul play from KCB, NBK, Co-op, SASRA, and Kencom Sacco goes
unanswered.

It’s important to note that KCB and Kencom only has separate board
members, the rest remains same, meaning Kencom Sacco is a fully owned
subsidiary of KCB being a society for KCB Group staff.

Recently when the Sacco wanted to do a development project, real
estate, which would eventually be sold out to its members, KCB Bank
couldn’t finance it because it qualify as insider lending. This prompted
one of the managers Musa Adan to market Kencom Sacco’s loan to NBK
fraudulent board where a sh1.3 Billion loan was mischievously granted as
a bonafide longterm murabahah (whatever that means) financing. KCB Bank
is not an islamic entity but still Musa Adan managed to classify Kencom
Sacco’s loan as an Islamic product.

Kencom Sacco was in the end financed by NBK and they completed the
project. Due to too many kick-backs allegedly paid to Musa Adan, Wilfred
Musau and Mohamed Hassan, the  sh1.3 Billion loan remained unpaid and
hidden under the opaqueness Islamic Banking Portfolio.

When the KCB Group acquired NBK, Paul Russo the new MD of NBK opted
to establish how the SACCO loan was not paid despite all the developed
units which are sold as high as sh30 million being taken up only to find
out that Musa Adan, Wilfred Musau, Hassan Mohammed, Stephen Gathogo,
Sam Mundia, Joseph Kering and Eustace Nyaga were allegedly gifted with
house units to frustrate Remedial Measures.

It is said that the cost of Kencom Sacco houses were intentionally
hiked to favour a senior politician who has been shielding the corrupt
individuals at NBK. All the earlier sacked individuals at NBK were
tactfully retained.

As if the above issues are not enough, there has been more dirty and
filthy tricks at NBK, another bank whose staff are members of the Kencom
Sacco. One such trick is the accumulation of written-off loans that has
benefitted corrupt individuals at NBK.

This has attracted the attention of the new NBK MD Paul Russo who has
promised to drain the swamp. Acting on fear of being arrested,
embarrassed, taken to court and possibly taken to jail, former Managing
Director, CEO & Executive Director of National Bank of Kenya Wilfred
Musau recently paid off his Ksh35 Million Loan in cash.

The rot at the struggling lender is disturbing the new management.
The Russo-led team is keen on fixing the bank’s poor non-performing
loans.

While other lenders opt to hire loan recovery firms to pursue the
borrower at a discount or attach property to recover funds, NBK during
the tenure of Musau is reported to have engaged its clients directly to
reach a “gentleman’s agreement”, in this  kind of agreement, the
defaulter could agree to pay only part of the loan recoverable and be
allowed to refinance and continue with the relationship with the bank
after washing off the legacy debt.

It is said Reuben Koech, Chris Muiga, Musa Adan and their proxies,
colleagues with the blessing of the former NBK MD Wilfred Musau would go
to some of the big clients to demand kickbacks to effect the
write-offs.

“Reuben Koech and Wilfred Musau were sacked on Thursday of December
5, 2019 for various counts of fraudulent activities with the recent
being fraudulent release of securities for non-performing borrowers in
exchange of bribes. Said Borrowers confessed after being cornered by DCI
& EACC” a source revealed.

“Reuben Koech colluded with Eustace Nyaga of remedial department and
released securities belonging to Chris Kisire as a tribal and kick back
consideration. This is despite Kisire’s loan being Non-Performing” a
source privy to the happenings said

This bad habit cost the bank bad loans, estimated at Sh32 billion.
The share of the bank’s Non-Performing Loans (NPLs) ratio to total loans
stood at 68.8% in the nine months ended September 30 compared to 47% in
December last year.

It’s reported that Reuben Koech, Wilfred Musau, Musa Adan and Chris Muiga were recently fired and are being processed to be charged in court.

via 254 news


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