Nairobi,
Monday May 6, 2024
KNA by Sharon Atieno/ Rebecca Wairimu
The Ministry of Cooperative and Micro, Small and Medium Enterprises (MSMEs) Development has underscored its commitment to upholding principles of good corporate governance and integrity within the cooperative sector.
Ministry of Cooperatives and MSMEs Development Cabinet Secretary (CS) Simon Chelugui said that the ministry remains committed to fostering a culture of transparency, accountability and ethical conduct within the cooperative sector.
He added that the ministry will spare no effort in safeguarding the interest of cooperative members and promoting sustainable development across all facets of cooperative enterprises.
“As custodians of cooperative resources, we remain steadfast to our duty to ensure responsible and transparent management for the benefit of all stakeholders,” he said.
The CS noted that the ministry had recently received the findings of an inspection conducted by the commissioner for cooperative development in October 2022.
He said administrative measures were taken which included the dismissal of implicated top managers and administrators.
The CS said that the ministry has appointed Grant Thornton, a reputable auditing firm which conducted examinations of the Union’s financial affairs and found systemic deficiencies in the management of resources, including creative and unreliable financial records.
He said that the audit revealed unreliable financial records including high cash withdrawals totaling to Sh5.46 billion between February 2013 and April 2024, Inter Subsidiary Cash Transfers, loans to Senior KUSCCO staff and directors among others.
“It has come to light that despite incurring losses, the union proceeded to declare bonuses, dividends and interest, a practice that cannot be condoned,” said Chelugui.
He added that a consultative meeting that was convened last month with representatives from depositors reached a unanimous consensus on the future of the Union where they concluded that the current board of directors had failed in its duty to steer the union.
Chelugui acknowledged that the ministry has taken decisive action on the matter with the interest of ensuring accountability, and restoring confidence while reiterating the dismissal of the current board of directors.
He announced that the commissioner for cooperative development will appoint an interim board of 15 members drawn from esteemed leaders of affiliate cooperatives who will oversee the transformation and rehabilitation of the Union.
Courtesy; KNA