Capital Markets

Regulator dismantles Murang’a governor’s investment vehicle

Murang’a County Investment Co-operative Society was initiated by governor Mwangi wa Iria in 2014. PHOTO | FILE
Murang’a County Investment Co-operative Society was initiated by governor Mwangi wa Iria in 2014. PHOTO | FILE 

The controversial Murang’a County Investment Cooperative Society, initiated by governor Mwangi wa Iria in 2014 for residents to jointly save and invest, has been dissolved.

The initiative, which President Uhuru Kenyatta heaped praise on in the 2014 Jamhuri celebrations speech, has failed amid opposition.

A gazette notice dated November 25 and signed by Alice Mwendwa on behalf of the Registrar of Companies announced the dissolution.

According to Mr wa Iria, “there was nothing wrong with the company, only that it was subjected to bad politics by my political opponents. It is a classic case of a good project beneficial to our people being dragged into a propaganda war till it died.”

He said that negative campaigns by opponents led to residents losing faith in the project.

“The people we were mobilising to save gave up and the company could no longer meet its legal working guidelines. Most accounts ran idle and there were no returns to be filed. Eventually it ran into the bad books of the regulator and it was dissolved,” he said.

Mr wa Iria said that by 2015 members had saved Sh10 million, which has since been invested in a piece of land on the outskirts of Murang’a town.

“The members who numbered 20 were patient and went on depositing their savings. When the management of the company informed them of the bad twist, they agreed to search for an asset to buy under an independent self-help group,” he said.

“Our noble idea was to match every shilling received from the national government with an equal shilling contributed by us — hence the ‘shillingi kwa shillingi’ concept,” he said.

Murang’a is famous for successful investment groups despite the failure.

Mr wa Iria said his opponents claimed that the initiative was a pyramid scheme aimed at raising campaign funds for him.

“Under such a hostile atmosphere, our objective of recruiting 100,000 members making a monthly saving of Sh3,000 translating to annual savings of Sh3.6 billion went up in smoke” he said.

Kiharu MP Irungu Kang’ata was optimistic that the initiative would still benefit Murang’a people.

“The governor has an independent mandate which is derived directly from the people. Essentially, this means that the governor’s projects do not need to be vetted by either the senator or the women representative,” said Mr Kang’ata.