Auditor-General Edward Ouko
CBK (Central Bank of Kenya
Chase Bank
Imperial Bank
Kuramo Capital
Mr Ouko
National Social Security Fund (NSSF
New York
Sh329.5 million
Sh417.7 million

Ouko wants 4 NSSF fund managers fired

Auditor-General Edward Ouko wants the National Social Security Fund (NSSF) to kick out four of the five fund managers it has contracted to oversee retirees’ savings for making risky investment decisions that led to loss of nearly Sh1 billion.

Mr Ouko, in the NSSF’s financial statement for the year ended June 2017 published Thursday, wants GenAfrica, Britam, Old Mutual and Stanlib locked out for exposing workers to possible loss of Sh969.72 million in collapsed Imperial and Chase banks.

The four fund managers have been accused of recklessly investing a cumulative Sh996.4 million – comprised of Sh666.90 million in corporate bonds and Sh329.5 million in fixed deposits – in the two lenders.

Mr Ouko says only Sh26.68 million of the cash invested between September and October 2015, and which was not disclosed in previous financial statements, had been recovered as at June 2017.

He argues that the NSSF did not receive value for the Sh181.52 million it paid out to the fund managers in consultancy fees during the year ended June 2017.

“It’s also not clear whether the deposits were insured,” Mr Ouko says.

“The three-year contracts of the current fund managers were renewed in the year 2014/15 (July 2014-June 2018), and it is recommended that the fund managers be changed on expiry of their contracts.”

Old Mutual Asset Managers, the statement shows, injected Sh417.7 million of the NSSF funds into the two beleaguered lenders followed by Britam with Sh391 million.

GenAfrica, majority-owned by New York-based Kuramo Capital, bet Sh218.5 million of the workers’ savings in Imperial and Chase, while Stanlib sunk Sh100 million in Chase’s corporate bond.

“The fund (NSSF) has, however, indicated the likelihood of recovering most of the investments after CBK (Central Bank of Kenya) carried out an expression of interest and received initial bids to sell Imperial Bank to pay off depositors, while Chase Bank was re-opened and reportedly acquired by SBM Kenya…,” he added.

Big depositors with the collapsed banks are however expected to recover only a portion of their cash, since a big chunk of the funds were lost through theft buy managers and directors of the failed lenders.

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