R.B
JF-Expert Member
- May 10, 2012
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Kenya:The National Social Security Fund financial statement, for the year ended June 2011, revealed that it lost Sh2.1 Billion due to poor investments
The figures were revealed on Monday, 18[SUP]th[/SUP] September 2012, during the NSSF's first AGM in 47 years. The report revealed that the fund had deposited 2.1 Billion shillings with at least 10 financial organisations that had gone bust, hitting the fund with staggering losses that it has no hope of recovering.
Additionally, the fund also invested 1.3 Billion shillings on illegal forest land in gazetted zones. The news is a big blow to the fund's 1.4 million active members in Kenya.
During the meeting, Mr Edward Ouko, Auditor General, quizzed the board about irregularities in its investments and other transactions. Mr Ouko noted that the fund invested in properties that ‘cannot be owned, possessed, utilised or accessed and any development on such land would be illegal' since they are located in gazetted areas. He also pointed out the fact that the fund doesn't have a provision in its 2011 financial statement for the losses when it clearly showed that the bad investments will cost it Sh1.13 billion.
Mr Ouko was also dissatisfied with how the fund handled the sale of Ojijo Road, a government gazetted plot. NSSF sold the property for 303 Million Shillings. However, Mr Ouko said that the sale violated the ‘procurement and disposal laws' as it was not advertised, and the fund could not confirm how they identified the buyer and how they determined the selling price.
He also questioned the 6.5 Billion shillings suspended account, and wanted to know how the affected members will benefit from their contribution.
So far, NSSF has not published a comment regarding the issues.
List of failed investments
1) Prudential Building Society - Sh989.9 million
2) Post Bank Credit Ltd - Sh553 million
3) Trade Bank - Sh197 million
4) Thabiti Finance Company - Sh166.5 million
5) Rural Urban Credit Finance - Sh131 million
6) Continental Credit - Sh57 million
7) Pioneer Building Society - Sh34.9 million
8) Trade Finance - Sh6.6 million
9) Middle Africa Finance - Sh3.6 million
10) Nairobi Finance Corporation - Sh3.3 million
