A mystery individual identified only as D21 appeared in more than 60 land transactions at SIC Investment Co-operative and is at the centre of a fraud scheme that drained hundreds of millions of shillings, a forensic audit shows.
The audit by BDO East Africa says D21, modelled as an agent/director, as the mastermind in the flawed land purchase deals between 2016 and 2020 that cost the society hundreds of millions.
In a presentation to members during a meeting last Saturday, auditors detailed how D21 orchestrated transactions involving overpriced and uninhabitable land, parcels without title deeds and even non-existent plots.
‘The audit found that deals directly or indirectly done by D21 ended up costing members Sh379 million. The co-operative continued engaging him even though the lands he had helped acquire or brokered turned out to be problematic,’ an auditor from BDO East Africa said.
Hidden identity
While the audit does not name the fraudster, the co-operative’s board chairman said the person is a Mr Sankok.
The forensic review cites several SIC projects, including Kanyonyoini, Tinga, Malili 1, Kimuka, Adelaide and Katani, where D21 played a central role in transactions that ultimately resulted in losses.
Auditors flagged multiple irregularities, including different sale agreements for the same parcel, land already sold to third parties, acquisition of public land, and purchases from individuals who were not the legal owners.
‘SIC had sold 18 plots to its members before confirming who owned the land (public land),’ the report states.
In one case, D21 is accused of selling the Tinga project near Kiserian in Kajiado County for Sh65 million despite not being the title holder. The 2016 transaction later forced SIC to refund Sh138 million to customers after it emerged the society had been defrauded.
Member anger
The failure to disclose D21’s identity has sparked anger among members, who commissioned the audit to establish the full extent of losses following earlier governance concerns.
An internal audit last year had already raised red flags over uninhabitable land stocked up by the co-operative’s board and management and had failed to fetch buyers, inflated purchase prices and instances where the board ignored technical advice.
SIC members have also raised concerns over the fate of more than Sh400 million invested in a fixed deposit product, Pepea, which was channelled into underperforming assets, including problematic land deals and the loss-making Miran Housing Project in Ruaka.
‘How do we pay for an investigation and then get piecemeal information? Let this person we are talking about (D21) be named,’ said a member, Mercy, during the Saturday meeting.
Another member, Anthony Kiarie, questioned whether missing documents may have compromised the audit’s integrity. ‘Are we allowed to unmask those who have put us in this position. We are told some documents could not be obtained for the audit, does this not interfere with the audit?’
Cooked books
Tensions have remained high within the 5,000-member co-operative since the Nation exposed how members risk losing about Sh2 billion due to past bad land and property deals.
During the meeting, board and management were put to task to explain the failures.
‘There are many land issues we could have investigated further, but the audit would cost us an arm and a leg,’ said board chairman Vincent Opiyo.
The 400-page forensic audit also found that the co-operative in 2024 manipulated its books, transferring Sh611 million in past costs to land stock to mask its true financial position.
Many members are seeking to exit but remain locked in, unable to sell their shares. Shares issued as early as 2019 remain unsold, according to the board.
The Deputy Commissioner for Co-operatives said authorities will pursue those behind the fraud once the audit is formally reviewed.
‘The consultants may have hidden names, but we shall identify them once the report is fully reviewed. Let us address the wrongs done to members while allowing the co-operative to recover,’ he said.