Help trace our lost Sh3.5 billion, pensioners plead with regulator

Kenya Railways headquarters in Nairobi. FILE PHOTO | JENNIFER MUIRURI |

By  NATION CORRESPONDENT

What you need to know:

  • Effects of fraud have trickled down, with the lowest paid pensioner getting Sh3,000 per month.
  • An earlier team managing Kenya Railways assets was disbanded in 2012 over fraud allegations.

Kenya Railways pensioners want an audit on the scheme’s accounts and tracking of an estimated Sh3.5 billion lost through fraud.

The 9,600 retirees also want the Retirement Benefits Authority (RBA) to scrutinise its previous audit, which highlighted multiple corrupt practices by trustees, resulting in loss of revenue through dishonest disposal of assets.

“The scheme was fraught with corruption, breach of trust, abuse of office, fraudulent disposal of assets and other malpractices,” said an inspection report by RBA in 2011.

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Kenya Railways Pensioners Association Secretary-General Robert Azaria said no action had been taken by either Kenya Railways Corporation (KRC) or RBA, despite the allegations.

Pensioners also want Mr James Olubayi, the chairperson of the Sole Corporate Trustee (of the retirement scheme) to be stopped from selling assets without valuation. The scheme’s current portfolio is worth Sh30 billion.

SELLING PRIME PROPERTIES

“Mr Olubayi is now selling more prime properties at the Upper Hill area of Nairobi at Sh262 million per acre yet the current going price is in the range of Sh500 million,” said Mr Azaria.

Effects of fraud have trickled down, with the lowest paid pensioner getting Sh3,000 per month. “We want the 6.5-acre piece of land at Upper Hill re-advertised and sold appropriately, the proceeds should help pensioners,” said Mr Azaria.

He said proceeds should be directed towards a joint venture to increase monthly pension and secure medical insurance for members.

The scheme owes members accrued monthly payments of Sh200 million. Pensioners want the dues to attract Sh20,000 monthly earnings per pensioner. The scheme was established in 2006.

An earlier team managing the assets was disbanded in 2012 over fraud allegations. A corporate trustee, Corporate & Pension Trust Services Limited — a wholly-owned subsidiary of Alexander Forbes, was then put in place.

It was to deliberate on disposal of estates, payment of pension dues and to complete the transfer of assets to the scheme by Kenya Railways.

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