A section of teachers now want Mwalimu National Sacco management to resign fearing that they would plunge the Sacco into a deeper financial mess after reports emerged that the teachers' bank, Spire, was on its deathbed.
Reacting to reports that Spire Bank, which mainly gets its finances from the Sacco, is on its deathbed unless at least Sh4 billion is injected into the business to salvage it, the teachers from western Kenya blamed the management at Mwalimu Sacco for failing to address the challenges facing their bank.
The teachers have called on the Ethics and Anti-Corruption Commission (EACC) and the Directorate of Criminal Investigations (DCI) plus the Sacco Societies Regulatory Authority (Sasra) to conduct forensic audit of the institution and lifestyle audit of its directors and delegates.
Mr Walter Bwire, a member from Kakamega County, claimed the February polls were shambolic and marred by irregularities. "There were no registers to prove membership of the voters and everyone was allowed to participate. The election was run by Kuppet officials to ensure their members won most of the seats to run the Sacco. We are suspecting that Mwalimu Sacco has been funding Kuppet activities," noted Mr Bwire.
This comes days after the Sacco’s chairman Wellington Otiende moved to calm teachers, who own the struggling bank, saying that they were doing all they could to remedy the situation. In a statement, Mr Otiende, who was recently elected for another three-year term, said that between 2014 and 2016, the Sacco undertook major investment decisions such as construction of its headquarters, Kisaju houses and the bank, which have tied members’ money.
“This has been compounded by the loss-making subsidiaries such as the bank,” Mr Otiende explained.
Spire Bank, formally Equatorial Commercial Bank, is fully owned by teachers who purchased it from billionaire Naushad Merali through Mwalimu Sacco late last year.
Mr Otiende said that the former shareholders of Spire Bank, Naushad Merali, withdrew his deposits from the bank in 2016 amounting to Sh1.7 billion, weakening it’s liquidity position.
The Sacco said it had been operating on an overdraft facility of Sh1.35 billion per month until November 2019. It also restructured a term loan of Sh3.65 billion to a cheaper loan.
"As members are aware, Mwalimu National Sacco has never been in such a perilous situation. Since its founding in 1974, the Sacco had been the most stable savings and credit cooperative society in Kenya and Africa," Mr Otiende said as he pleaded with members to give his team more time to sell the bank.