Saccos seek charges for CEOs over firms’ failure to remit Sh2bn

Co-operative societies are pushing for punitive criminal and civil penalties against State agencies and private company chief executives who fail to remit statutory deductions on time.

The societies said they are owed about Sh2 billion in unremitted employee deductions. Co-operative Alliance of Kenya chief executive Daniel Marube wants individual office holders and owners of private companies held personally liable.

“Some businesspeople are extremely shrewd, in that they close down old entities and establish new ones to evade payment of statutory deductions. They continue to drive big vehicles and lead affluent lifestyles while workers suffer in abject poverty since someone squandered their money,” said Mr Marube during a co-operatives forum in Nairobi.

Hazina Sacco Society national chairman Evans Kibagendi vouched for introduction of severe penalties noting societies were experience cash flow challenges due to delayed remittance of member funds.

“Some members involuntarily default on loan repayments resulting in imposition of penalties thereby adversely affecting society-member relations. Such companies must have their chief executives held liable with possible jail terms and fines commensurate to defaulted sums,” he said.

Mr Marube proposed the Ethics and Anti-Corruption Commission (EACC) should be involved in investigating such non-remittance claiming that some chief executives use the monies to enrich themselves at the expense of members.

“The Co-operatives Secretary must act firmly to restore faith in the movement. Co-operative societies are for people keen on joining hands to raise funds to uplift their livelihoods,” he said.

Acting Commissioner of Co-operatives Ludidacus Ityeng supported the calls and said a clause will be included in the soon-to-be amended National Co-operative Development Policy placing sole liability on non-remittance on chief executives.