Over 5,000 members of Safaricom Investment Cooperative (SIC) risk losing Sh2 billion due to poor management. A special audit revealed much of the purchased land is fake or unsellable. The annual general meeting was postponed as the firm expects its first loss in five years.
Poor management at Safaricom Investment Cooperative (SIC) has put more than 5,000 members at risk of a Sh2 billion loss. This stems from years of mishandling funds collected from members and customers, with the board approving purchases of worthless land plots.
SIC's core activities involve buying land to resell for profit and building houses for sale. The firm now holds land valued at Sh1.6 billion that is hard to locate or sell, with some plots on rocky terrain or entangled in family disputes.
A special audit ordered by members a year ago criticized the board for approving these deals and ignoring technical advice. The report stated, “Ukaguzi wa kina ulifichua kuwa ardhi yenye thamani ya Sh1,391,834,840 (asilimia 53 ya thamani ya mali yote kwa jumla) inazingirwa na utata kuhusu masuala anuai. Aidha, ardhi yenye thamani ya Sh245 milioni ilijumuisha vipande vya ardhi ambavyo vipo lakini, vinakabiliwa na changamoto zinazovifanya visiuzike.”
Nearly half the controversial land proved fake after officials reclassified prior-year costs as new purchases, inflating value by Sh627 million. Auditors condemned the 2024 external auditor for manipulating accounts. Profits exceeding Sh600 million from 2021 to 2024 now face validity questions.
For the first time in five years, SIC expects 2025 losses, and the Annual General Meeting (AGM) scheduled for last month was postponed.