The Central Organisation of Trade Unions (Cotu) secretary-general
claims that liquidated Thabiti Finance Company Ltd associated with
Public Services Minister Dalmas Otieno owed National Social Security
Fund (NSSF) the money before it collapsed in 1994.
Mr Atwoli says Mr Otieno should explain what became of the Sh250 million.
Atwoli, whose membership in the NSSF Board of Trustees has been a bone
of contention, is apparently upset with the minister's recent decision
to withdraw 26,000 junior civil servants from the provident fund into a
new contributory pension scheme beginning July.
He says the minister should be the last person to interfere with the operations of NSSF.
Atwoli alleges conflict of interest and unfinished business when the
minister makes changes at the NSSF before addressing the alleged Sh250
million deposits.
"The Hon (Dalmas) Otieno was associated with a financial institution
called Thabiti Finance Company Ltd which owed the NSSF more than Sh250
million by the time it folded in December 1994," Atwoli said.
Poor workers
The junior civil servants' withdrawal from NSSF is projected to reduce the fund's financial base by Sh124.8 million a year.
Atwoli said this is in bad taste as the workers' fund caters for many poor workers.
But Otieno has denied Atwoli's claim that Thabiti owed NSSF Sh250
million. Speaking to The Standard on the telephone last night, the
minister said: "By the time the bank collapsed, I think NSSF was owed
Sh26 million. Atwoli has multiplied this by ten."
Otieno said the Thabiti issue is separate from NSSF's as the decision
to move junior civil servants to a new scheme is intended to end the
discriminatory policies that relegated them from their seniors.
"Atwoli is just being cheeky because he is part of the mess at NSSF,"
Otieno claimed, adding that the loss of Sh26 million is no excuse for
NSSF's failure to comply with the Revenue Benefits Authority
regulations.
"This is a serious policy issue. Bringing in Thabiti is a diversionary
tactic which is unacceptable," he said, adding that he was only a
shareholder at Thabiti and had quit as chairman seven years before the
bank collapsed.
"It was not in my hands," he said of Thabiti. "I was only a shareholder with less that 25 per cent shares."
Mischief and politics
At the same time, ODM Chief Whip and Gem MP Jakoyo Midiwo read mischief and politics in Atwoli's allegations.
"Cotu should not drag unnecessary and erroneous historical issues into
the envisaged reforms. What the minister is doing is in the interest of
lower-cadre civil servants. Atwoli should not use diversionary tactics
to disrupt the process," Mr Midiwo said.
He said Cotu must get its facts right on the issues surrounding the
reforms instead of maligning the Public Service minister's name.
"It is not Dalmas who led to the collapse of Thabiti. The blame should
be directed to the entire regime. If Cotu wants to drag politics into
the NSSF reforms, we are waiting," he said.
He added: "We are for fair play in reforms and misrepresentation of history shall not be allowed."
But Atwoli said what NSSF needed was the support of Government, Kenyans and stakeholders, not reckless condemnation.
"Despite the weakness that politicians have dramatised, the (NSSF)
management and the board resuscitated the giant institution from the
ICU to profitability, building an enviable portfolio of close to Sh100
billion," he said.
Atwoli further claimed that other Government plans include a proposal
to sell the National Bank in which NSSF has solid shareholding. He is
similarly opposed to this.
"When the bank started making impressive profits, a proposal that it be
sold to a strategic investor was quickly mooted," Atwoli said, adding
that Otieno should explain to Kenyans why NBK wanted to be sold to a
strategic investor just when it has begun to make profits for the
benefit of workers.
Thabiti Finance Company Ltd was taken over by the Government in the
mid-1990s when it collapsed with an estimated Sh800 million of
depositors' money.
Between the mid-1980s and mid-1990s, about a dozen banks and financial
institutions collapsed and were taken over by the Central Bank which
inherited their debts and injected funds to form the Consolidated Bank
of Kenya.
Last payments
However, Thabiti Finance Company Ltd and other troubled institutions
were taken over by the Deposit Protection Fund (DPF), a Government
regulator at the Treasury.
It also took over its debts and later liquidated it. The DPF began to pay creditors and depositors in May 1998.
The last payments were made between March 17 and April 17, 2004,
according to Press notices by the DPF board. A condition for refund was
that depositors and creditors prove the defunct company's indebtedness
to them.
On March 8, 2007, the National Bank advertised the sale of Thabiti's
land in Nairobi. It is not clear if DPF paid all the money owed by the
liquidated institutions to all creditors.
The Standard
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