Metropol CRB CEO Omukoko Implicated in Ksh111 Million Financial Scandal, Raising Alarms Over Data Security

Samuel Omukoko accused of unauthorized salary payments and fund withdrawals as Central Bank audit exposes massive governance failures

Samuel Omukoko, the Group Managing Director of Metropol Credit Reference Bureau, has been implicated in a financial scandal totaling over Ksh111 million, according to court documents filed by the Commission for Human Rights and Justice.

The scandal, which has rocked Kenya’s credit information industry, involves unauthorized salary payments of Ksh29 million and unexplained fund withdrawals of Ksh82.8 million from company accounts without proper board authorization.

Central Bank Audit Exposes Massive Irregularities

The financial irregularities came to light during a targeted inspection conducted by the Central Bank of Kenya’s (CBK) Bank Supervision department in July 2022.

The audit revealed that Omukoko had been drawing salaries as Group Managing Director without a formal appointment letter or board resolution.

Even more concerning, the CBK investigation uncovered that Omukoko had made additional unauthorized drawings from company coffers totaling Ksh82.8 million during the same period he was earning his disputed salary.

The audit findings paint a picture of a company in financial distress, with Metropol CRB’s liabilities reaching Ksh487.9 million against assets of only Ksh31.2 million as of July 2022.

Governance Failures Exposed

The CBK inspection revealed multiple governance failures at Metropol CRB, including:

• Inadequate Board Composition: The company operated with only four directors for an extended period, violating regulations requiring at least five directors
• Irregular Board Meetings: The board failed to meet quarterly as required by law
• Lack of Independence: The parent company and subsidiary shared office space and directors, compromising operational independence
• Delayed Response: Despite CBK’s 15-day deadline for corrective measures, the companies only held a joint board meeting six months later in December 2022

Data Security Concerns

Beyond financial irregularities, the audit exposed serious data security breaches.

Metropol CRB was found to have onboarded numerous unauthorized and unlicensed agents across the country who were handling confidential financial data.

This is particularly alarming given that Metropol CRB maintains credit information for over 19 million Kenyans, with approximately 6 million blacklisted as loan defaulters.

The company’s database effectively captures the majority of Kenya’s adult population.

Legal Action Seeks License Suspension

The Commission for Human Rights and Justice has filed a constitutional petition seeking the temporary suspension of Metropol CRB’s operating license.

The petition argues that the Central Bank has failed to take decisive action despite its own audit findings.

The court application, filed in March 2024, seeks to halt the company’s operations while the issues are resolved, citing risks to public data security and the integrity of Kenya’s financial system.

Metropol Corporation, established in 1996, has been a pioneer in Kenya’s credit information industry.

The company expanded into credit rating services in 2006 and obtained its CRB license in 2011, becoming one of Kenya’s primary credit reference bureaus.

The scandal has raised serious questions about regulatory oversight in Kenya’s financial sector and the protection of consumer data.

With millions of Kenyans’ financial information at stake, the case highlights the critical importance of proper governance in institutions handling sensitive personal data.

Recent Developments

Recent reports indicate that the High Court has dismissed the petition to suspend Metropol CRB, though the full details of the court’s reasoning remain unclear.

The company continues to operate its credit reference services while these governance issues remain unresolved.

The scandal comes at a time when Kenya’s credit reference bureau industry is expanding rapidly.

As of September 2024, Metropol CRB had compiled credit data for more than 21 million Kenyans and 800 businesses, with 14 million active borrowers.

The case underscores the need for stronger regulatory oversight and corporate governance standards in Kenya’s financial sector, particularly for institutions handling sensitive consumer data and playing critical roles in the country’s credit ecosystem.