House team orders probe into accounts of giant farmers’ union

Tuesday October 26 2010

By NATION REPORTER

A parliamentary committee has ordered criminal investigations into alleged fraud at the Kenya Planters Cooperative Union.

The committee further wants an inquiry into how the Kenya Commercial Bank appointed receiver managers for KPCU.

The Committee on Agriculture, Livestock and Cooperatives has asked the Kenya Anti-Corruption Commission (KACC), the Criminal Investigations Department (CID) and the Anti-Banking Fraud unit to carry out the investigations after holding a meeting with the KCB management Tuesday.

The committee alleges faulty entries in KPCU accounts at KCB totalling Sh2.5 billion.

The committee declared the KCB management team, which appeared before it for questioning, hostile, as chairman John Mututho (Naivasha) said the committee suspected the bank was part of a scheme hatched to “kill” KPCU.

“You should have done better to salvage it. We suspect that you are hell-bent on killing KPCU,” said the chairman.

The KCB team, led by the bank’s chairman of the board of directors, Mr Peter Wanyaga Muthoka, said it had provided all the information it had to the parliamentary team and said it would respond to further questions through writing.

The 11-member team is conducting an inquiry into the affairs of KPCU. One of the issues being looked into is the loans advanced to KPCU by KCB.

Tuesday’s meeting with the bank’s board of directors and other managers was the third.

The parliamentary committee wanted the team to shed light on what informed the bank’s decision to appoint receiver managers from Deloitte Consulting Ltd, which had earlier conducted a forensic investigation in the same company.

However, the bank’s chairman, maintained that KCB could only release the receiver managers if KPCU cleared its debt of about Sh634 million.

Mr Mututho accused the receiver managers of only selling the assets of KPCU and collecting rent.