Probe ordered into Mwalimu Sacco's Sh2bn ECB deal

What you need to know:

  • A team has been formed to probe and report to the Commissioner of Co-operatives on the sacco's investment, which prompted the Co-operative Alliance of Kenya to register its protest over the handling of the transaction.

  • Commissioner of Co-operatives Patrick Musyimi on Tuesday said it is important that the inquiry team be given sufficient time to work and forward details of the transaction to his office so that the interests of sacco members are protected as per the law.

  • The Sacco last year announced its plans to acquire a majority stake in ECB but the process was shelved pending a fresh audit of the deal.

  • The savings society had made a Sh2.5 billion offer to billionaire businessman Naushad Merali, the bank's owner, for a 51 per cent stake in the financial institution.

The government has ordered an investigation into Kenya's largest savings society, Mwalimu Sacco, over its bid to acquire Equatorial Commercial Bank (ECB).

A team has been formed to probe and report to the Commissioner of Co-operatives on the sacco's investment, which has prompted the Co-operative Alliance of Kenya to register its protest over the handling of the transaction.

Commissioner of Co-operatives Patrick Musyimi on Tuesday said it is important that the inquiry team be given sufficient time to work and forward details of the transaction to his office so that the interests of sacco members are protected as per the law.

“We will share the details of the inquiry as soon as they are finalised,” Mr Musyimi said in a statement to newsrooms.

The move, he added, would subject the matters to a rigorous process that would ensure any pertinent issues are addressed before the investment continues.

PLANS TO ACQUIRE

The sacco last year announced its plans to acquire a majority stake in ECB, but the process was shelved pending a fresh audit of the deal.

The savings society had made a Sh2.5 billion offer to billionaire businessman Naushad Merali, the bank's owner, for a 51 per cent stake in the financial institution.

Mwalimu Sacco's membership is drawn from the Teachers Service Commission (TSC) Secretariat and TSC teachers in secondary schools and tertiary institutions.

The sacco also has primary school teachers, the Mwalimu National Sacco Society staff and members’ spouses in formal employment.

The savings society was formed and registered as a sacco in 1974 with 145 members, who have increased to 57,521 as of March 2014.

By 2012, the average savings per member stood at Sh316,354.