Why Kenya Railways retirees want annual meeting halted

Commuters as they waited to board a train at Kenya Railway Station, Nairobi. Over 8,000 retirees of Kenya Railways want the government to stop today's AGM. PHOTO | WILLIAM OERI | NATION MEDIA GROUP

What you need to know:

  • The retirees want the AGM to be presided over by a neutral person.

  • They say first agenda should be appointment of the corporate trustee and a forensic audit of the scheme’s accounts.

  • They want the Sh31 billion scheme secured from eminent collapse.

Over 8,000 retirees of Kenya Railways want the government to stop today's Annual General Meeting (AGM) for the Kenya Railways Staff Retirement Benefit Scheme (KRSRBS).

Corporate and Pension Trust Services Ltd, the firm that manages the scheme had planned to hold the meeting at the Railways Club in Nairobi.

EMINENT COLLAPSE

In a letter seen by the Daily Nation, officials of the Former Kenya Railways Workers Association (Fokerawa) have appealed to the Ethics and Anti-Corruption Commission (EACC), the Director of Criminal Investigations and the Director of Public Prosecution (DPP) to halt the AGM and secure the Sh31 billion scheme from its eminent collapse.

“If this AGM is allowed to take place, mismanagement of the scheme’s assets will continue with impunity as the sole corporate trustee would want to rubberstamp their agenda,” said Mr Henry Wamukota Toili, the national secretary of Fokerawa.

The pensioners want the AGM to be presided over by a neutral person. “The first agenda should be appointment of the corporate trustee, a forensic audit of the scheme’s accounts, review of trust dividends rules, pensioner’s representation and a strategic plan for the scheme since it is in a crisis,” observed Mr Kanyeki, the organising secretary at Fokerawa.

"The sole corporate trustee’s exit elections should be the agenda if this AGM is to continue,” Mr Toili said.

LEGAL LEGITIMACY

"The AGM comes after missing prior meetings for four consecutive years which is against the Retirement Benefits Authority (RBA) regulations. By allowing this AGM, it shows that both our sponsor, the Kenya Railways Corporation and the RBA are willing to perpetuate illegalities, Mr Toili added.

Corporate and Pension Trust Services Ltd was appointed to manage the KRSRBS on June 29, 2012 and their three-year term lapsed in June 2015. The RBA Act requires that sole corporate trustees only manage a pension scheme for three years after which their term can be extended for only three years by the members through an election.

“Corporate Trust Pension Services Ltd has no legal legitimacy to call for an AGM. They should be the agenda of the meeting because of the manner in which they have run down our pension scheme,” Mr Kanyeki added.

CONFLICT OF INTEREST

Audited accounts of KRSRBS as at June 2017 show that the total amount of benefits paid to members was slightly over Sh404 million, while the administration expenses amounted to over Sh932 million.

A conflict of interest in the appointment of the Kenya Railways Corporation chairman Michael G. Waweru, the pensioners say, has worked against the scheme since he is also the current chairman at Zamara Group (formerly Alexander Forbes Financial services), which owns Corporate and Pension Trust Services Ltd.

The chairman of Corporate and Pension Trust Services Ltd – Mr James Olubayi, and its two directors – Mr Anthony Kilavi and Bungoma Governor Wycliffe Wangamati report the same chairman in Kenya Railways Corporation, as well as in Zamara Group.

“This gives leeway to a lot of compromises on our sponsor in how running the scheme is being mismanaged. The appointing entity should have known that,” says Mr Toili.