MP to press for compensation of pyramid scheme victims
Photo/FILE
DECI members wait outside the society’s offices for a refund of their money after the pyramid scheme collapsed in 2008.
Parliamentary Select Committee on Budget will be seeking Sh7 billion from the supplementary Budget to be tabled in Parliament next month to compensate victims of pyramid schemes.
The chairman of the committee, Mr Elias Mbau, also said he will be tabling a motion to have Sh4.8 billion meant for crediting the Jua Kali sector be withdrawn from three local commercial banks and instead be disbursed through District Social Services offices.
Speaking in Murang’a town on Saturday, Mr Mbau who also is the Maragua MP said Treasury will be pressed to act before the current Parliament is dissolved.
Mr Mbau said his committee will mobilise MPs to shoot down an attempt by Finance minister to have the supplementary Budget passed unless the money to compensate the two groups was included.
He said the beneficiaries of the two funds risk losing out if Parliament is dissolved since most offices will be devolved to regional governments “hence fragmenting the victims’ unity of purpose in pursuing compensations.”
In the rip-off by pyramid scheme, about 150,000 investors are believed to have lost more than Sh5.5 billion in mid 2000.
Mr Mbau said Sh1.5 billion will be interest accrued for the period the victims have been suffering while pushing for compensation.
The rot was exposed in Nyenze report (2009) that detailed the nature of the fraud and recommended that prominent people in the scheme be prosecuted and victims compensated.
Mr Mbau said his committee was unanimous that pyramid schemes were government supervised fraud against the victims and they must be compensated.
“Some of the architects in the fraud are former and current Cabinet ministers who used their positions to deceptively legalise the schemes through the ministry of Cooperatives only to later stage-manage their collapse hence robbing innocent Kenyans,” he said.
Late last year, Naivasha MP John Mututho was picked to lead a team to probe the scam.
Another push seeking to compensate the victims is being fronted by Mutito MP Kiema Kilonzo.
The structural format of the pyramid schemes was that, many of them were registered under different legal regimes but operated by the same people.
Out of the 270 institutions that were involved, 17 of them were registered under the Cooperative Societies Act.
