Former Blue Shield statutory managers face prosecution

Blue Shield offices in Nairobi. FILE PHOTO | NMG
Blue Shield offices in Nairobi. FILE PHOTO | NMG 

The Director of Public Prosecutions wants former statutory managers of Blue Shield Insurance including Eliud Muchoki charged with misappropriation of funds.

Director of Criminal Investigations Dorcas Oduor has in a letter to the public prosecutions forwarded a report from the Auditor General asking that the former manager records statements forthwith.

Mrs Oduor says there is sufficient evidence to hold the suspects criminally culpable.

“To enable us make a final decision on this matter, urgently cause the suspects if they so wish, to record statements under the inquiry on the issues raised against them, the proposed charges and the report of the Auditor General,” she says.

The recommendation follows a request by the DCI in 2016 for an inquiry into alleged misappropriation of funds and assets of Blue Shield Insurance Company limited, which has been under statutory management since 2011. The special audit was conducted from May 13, 2016 to July 29, 2016.

Blue Shield was incorporated in December 4, 1983 and all was well until September 2011 when it was placed under receivership and Mr Eliud Muchoki Muriithi appointed the statutory manager.

Mr Muriithi served as the manager from September 15, 2011 to July 4, 2014 earning a monthly salary of Sh1.2 million.

According to the Auditor- General, there was no documentary evidence indicating the criteria used for his appointment, how he was evaluated among other potential managers to ensure that he was the most qualified and competent.

The report noted that in December 2012, he increased his salary to Sh1.6 million per month and paid himself 400,000 per month for 19 months over and above the approved remuneration.

“It cannot be ascertained whether he was the most qualified and competent statutory manager and whether the Sh47,200,000 he received the entire period was commensurate to his competency,” states the report by auditor- general Edward Ouko.

Upon the expiry of his term, the Commissioner of Insurance appointed Policyholders Compensation Fund as the second statutory manager at a fee of Sh500,000 per month.