Court summons former NSSF boss in Sh1.6bn fraud case

Former NSSF managing trustee Ms Rachel Lumbasyo. Photo/FILE

In Summary
Ms Rachel Lumbasyo was ordered to appear before senior magistrate Doreen Mulekyo on December 6
Nineteen witnesses have been lined up to testify in the case

 By Thomas Kariuki
More by this Author
A former National Social Security Fund boss was yesterday summoned by a Nairobi court over claims that Sh1.6 billion was stolen during her tenure.

Ms Rachel Lumbasyo, a former NSSF managing trustee, was ordered to appear before senior magistrate Doreen Mulekyo on December 6, in a case in which the Ethics and Anti-Corruption Commission has accused nine NSSF officials of fraudulently disposing off public property.

The directors allegedly made fraudulent payments from the national social fund to Discount Securities Limited (DSL) for shares amounting to Sh1.6 billion, which EACC claims were never purchased.
The matter arose as the prosecutor, Mr Mungai Warui, was examining former Ambassador to Britain Nancy Kirui.

The prosecutor noted that Ms Kirui was a signatory of the NSSF Board of trustees and that she signed cheques worth 594 million authorised by the nine accused persons and the former CEO.

Retired NSSF Boss Naftalie Mogere, who was also at the dock, said he delegated work to senior officers whom he thought were capable of handling it.

“The cheques were made within the rules and regulations of payment of cheques by my office. The investment manager, who is among the accused, confirmed to me that what was ordered for is what was paid for,” Mogere said. “The finance board would look into the budget, approve it and give recommendations. The board would then approve the purchasing of the shares, payment of the cheques and then send the budget to the Ministry of Labour for approval.”

Mr Mogere said NSSF’s investment department, which is the custodian of investment policies, would write a report to the investment committee explaining whether, depending on the cash flow, NSSF could or couldn’t invest in shares and treasury bonds.

Mr Mogere was the NSSF CEO between 2002 and 2005.

PURCHASE OF SHARES

Defence lawyer, Mr George Moturi said Mr Mogere wrote letters, submitted as exhibits in court, ordering the purchase of shares and that it was during his tenure that NSSF bought 106 billion shares up from 1 billion shares he found.

“After I left NSSF, a lot of irregularities in purchasing shares flared up. I don’t have to speak for myself as my records tell what kind of a director I was,” Mr Mogere told the court.

Nineteen witnesses have been lined up to testify in the case which will continue from December 6 and 9 when Lumbasyo will testify.