The sacco regulator has backed the Capital Markets Authority on its warning to the public to avoid unapproved share sales by co-operatives, including those fronted by county governments.
Sacco Societies Regulatory Authority (Sasra) says it already circulated the regulatory requirements of raising funds to members, making them aware of the approval requirements as per the CMA Act.
“These saccos are well guided on issues of capital raising including provisions of section 30A(2) of Capital Market Act 2012, the guidance was issued in 2012 and copied to CMA after Saccos started raising capital through share drives and promotions,” said Sasra in an e-mail response to the Business Daily.
The Capital Markets Authority (CMA) on Tuesday issued another warning to the public against buying shares in cooperative societies that are being issued without the regulator’s approval.
The market watchdog said that the offer of sale of the shares has not been approved by the authority in line with Section 30 of the Capital Markets Act.
“The Authority wishes to caution the investing public that the said offer of shares by these societies has not been approved by the Authority in line with Section 30 of the Capital Markets Act,” said CMA in the latest cautionary notice published on Tuesday.
The CMA Act requires that a cooperative seeking to do such a share sale first publishes an information memorandum and files a copy of the same with CMA.
Speaking to Daily Nation in December, Sasra chief executive Carilus Ademba said the government agency had received a letter from the CMA on the activities of such cooperative societies and the two are scheduled to hold a meeting this month over the same.
He said cooperative societies ought to seek CMA approval before mobilising money from the public, as it is the responsibility of the regulator to protect the public’s funds.
Cooperatives not falling under the regulatory hand of Sasra are supervised by Commissioner of Cooperatives.
Among the cooperatives seeking to raise cash from the public include the Murang’a Investments Co-operative Society Limited that is championed by Murang’a Governor Mwangi Wa Iria.
The investment cooperative is currently seeking to raise Sh3 billion for infrastructure projects in the county via the drive dubbed shilingi kwa shilingi, a programme in which members can save Sh35 per day or Sh1,000 per month.
According to a disclaimer on its website, however, the initiative is a purely “cooperative-based resource mobilisation and not a public offer of shares.”
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