Probe into irregular loan pay-outs of Youth Fund nearly complete

May 24, 2018 11:25 am
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Speaking to Capital in the Morning, Osumba stated that stern action will be taken against any of the staff who included lending and investment manager together with senior accountant if they are found culpable in the irregularities/FILE

, NAIROBI, Kenya, May 24 – The Youth Enterprise Development Fund (YEDF) Chairman Ronald Osumba says investigations into seven members of staff suspended over alleged irregular loan disbursement are nearly complete.

Speaking to Capital in the Morning, Osumba stated that stern action will be taken against any of the staff who included lending and investment manager together with senior accountant if they are found culpable in the irregularities.

“If you were to really steal, don’t steal the money for giving the youths and then don’t collaborate with those very same youth, stealing from themselves and I found that to be very unfortunate because it involved youth groups and staff have collaborated and this is still under investigation, but the ones who were touched were sent home,” he stated.

He further revealed that the National Treasury is now conducting a full audit of the books at the organization to determine if there are other irregularities.

“We broke the story ourselves, we are on top of it and we have come from stealing Sh180 million and now at least it is Sh10 million and we are moving in the right direction and we will jail anybody found culpable. We have the DCI concluding investigations and we are also doing a full audit of the loan book,” he explained.

The suspension of the seven came at a time the fund was set to roll out a Sh1 billion this financial year as compared to Sh352 million in the last financial year, even after the government mooted on consolidating the financial institutions.

The Chairman, in a notice to suspend the seven, said that an audit report tabled on March 2, identified instances of irregular loan disbursement

He said that since the appointment of the new board in 2016, the fund has recorded an impressive increase in monthly loan uptake, from Sh20 million in 2016, to Sh100 million.

He also dismissed claims that the ongoing merger would disenfranchise those who are currently benefiting from the fund.

The government announced a plan to merge the Kenya Industrial Estates, Development Bank of Kenya, Industrial Development Bank of Kenya, Uwezo Fund, Youth Enterprise Development Fund and Women Enterprise Development Fund.

The move is aimed at increasing efficiency, resolving overlaps and better utilise resources to achieve economies of scale. Osumba said the merger had been planned since Jubilee came into office in 2013.

In 2015, the fund’s then Chief Executive Officer, Catherine Namuye, was suspended after the Banking Fraud Unit flagged suspicious transactions in the Youth Fund account that were brought to the attention of the board.

A year later, the board’s chairman Bruce Odhiambo resigned to allow investigations into the scandal.
Namuye and Odhiambo were later charged with 12 counts of corruption in relation to the loss of Sh180 million of taxpayers’ money.

They had been accused of receiving Sh4.5 million and Sh1.8 million in kickbacks from Quorandum that prosecutors said they had reasons to believe was corruptly acquired from the Youth Enterprise Development Fund.

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