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Former NSSF Investment Manager Francis Muturi was in late January found guilty of fraud involving the purchasing of shares by the NSSF. Anti-corruption magistrate Lawrence Mugambi found that Muturi and three others had schemed to defraud the NSSF over Sh. 1.4 billion through the fallen Discounts Securities Limited.
His co-accused were 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. 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.
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 Sh. 1.6 billion.
They 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.
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To secure his freedom, Muturi will now have to pay a fine of Sh. 2.6 billion or face 14 years in prison. In the sentencing, Githaiga, Mungoro and Nyakundi were sentenced to 12 years in jail or they pay a fine of Sh. 802 million each to secure their freedom. DSL has been fined Sh. 4.8 billion. The company is currently under liquidation.
