Ex-NSSF boss, three brokers found guilty of Sh1.4bn fraud


Milimani Law Courts in Nairobi. FILE PHOTO | NMG

A former National Social Security Fund (NSSF) investment manager and three stock dealers have been found guilty of conspiracy to defraud the fund of Sh1.4 billion through a collapsed stockbroker more than a decade ago.

Francis Zuriels Moturi, the ex-NSSF investment manager, was accused of scheming to steal from the workers’ fund through the purchase of shares.

His co-accused are David Ndirangu Githaiga, a former executive director of the defunct Discount Securities Ltd (DSL), its ex-finance director Wilfred Mungoro and Isaac Nyakundi, a former investments manager.

The court, however, acquitted former NSSF general manager in charge of finance and investments James Akoya, Mary Ndirangu, the fund’s former internal audit manager, and Orchard Estates Ltd.

The Anti-corruption chief magistrate Lawrence Mugambi ruled that the prosecution had proved that the four conspired with the collapsed stockbroker to steal the public funds.

They were charged more than a decade ago with, among other offences, irregularly trading in shares through DSL, a crime they committed between 2004 and 2007.

Other charges included fraudulent disposal of public property, fraudulently making payment from public revenue, willful failure to comply with the applicable procedures and guidelines relating to procurement of property, fraudulent acquisition of public property, conspiracy to defraud, deceiving principal, stealing by agent and neglect of official duty.

The court heard that, on diverse dates between August 2004 and July 20, 2007, they claimed to have bought various quantities of shares, without making purchases.

When NSSF converted from a provident fund to a pension fund in 2003, the board of trustees resolved to invest in shares, among other investments in diversification strategies, the court heard. The managers sought to invest in the collapsed broker and, in the process, lost more than Sh1.6 billion.

Evidence presented in court showed that the accused persons would request to be paid a specific amount as per the orders from NSSF regarding the purchases.

But upon checking Nairobi Securities Exchange reference numbers with information from Central Depository and Settlement Corporation, it was discovered that there were discrepancies in the number of shares bought.

The four have been remanded in custody until Monday (January 31, 2022) for mitigation and sentence. They face a fine three times the lost amount under the Economics and Corruption Act.