Sh13B KUSCCO Heist Takes New Twist: Presumed Dead Auditor Linked to Theft May Be Alive, Raising Doubts Over PwC Report’s Credibility

The Sh13 billion financial scandal at the Kenya Union of Savings and Credit Cooperatives (KUSCCO) has taken a dramatic turn, with revelations that Alfred Basweti, the external auditor presumed dead and whose signature was allegedly used to authorize fraudulent financial statements, may still be alive.

This shocking development has cast a shadow over the credibility of the forensic audit conducted by PricewaterhouseCoopers (PwC), which uncovered the alleged misappropriation of funds, and raises questions about the integrity of the entire investigation.

The PwC Audit and Allegations of Financial Irregularities

In 2022, PwC was commissioned to conduct a forensic audit into KUSCCO’s financial affairs following suspicions of mismanagement and embezzlement.

The audit revealed a web of financial irregularities totaling Sh13 billion, including falsified financial statements, unauthorized bank withdrawals, and conflicts of interest in contract awards.

The report specifically highlighted the misuse of Basweti’s signature to approve the 2022 financial statements, allegedly as part of a broader scheme to manipulate records and conceal the theft of funds.

Basweti, who previously worked with Omenya and Associates, the external auditing firm contracted to review KUSCCO’s accounts, was believed to have died before the financial statements were approved.

However, recent reports suggest that Basweti may be alive and living in obscurity, having retired from active practice.

This revelation, if confirmed, could undermine the foundation of PwC’s findings and provide ammunition for the defense of former KUSCCO executives implicated in the scandal.

Key Figures in the Scandal

The PwC audit implicated several high-ranking former KUSCCO officials, including former Managing Director George Ototo, former Finance Manager George Owino, and former Chairman George Magutu.

Magutu and Owino, alongside former employee Mercy Muthoni Njeru and lawyer Jackline Pauline Atieno Omolo, have already been charged in court over the alleged fraudulent acquisition of Sh82.8 million in a land transaction.

Ototo, who was sought in connection with the alleged theft of Sh82 million, was today granted bail after spending the night in police custody following his arrest on Monday.

The five ex-Kuscco officials charged today with stealing Ksh 82.8m made for purchase of a parcel of Land at Nairobi; George Magutu Mwangi, George Otieno Ototo, George Ochola Owino, Jackline P. Atieno and Mercy Muthoni.

He was released on a bond of Ksh 10 million or a cash bail of Ksh 3 million, with three contact persons required.

The audit also uncovered non-performing loans worth Sh3.7 billion, overstated profits totaling Sh798 million over six years, irregular commissions amounting to Sh2.7 billion, and mismanagement of the central finance fund to the tune of Sh1.3 billion.

These findings prompted Cooperatives Cabinet Secretary Dr. Wycliffe Oparanya to submit the report to Inspector General of Police Douglas Kanja, leading to the prosecution of the implicated individuals.

The Basweti Mystery: A Potential Game-Changer

The claim that Basweti may still be alive has introduced a new layer of complexity to the case.

According to sources, the information about Basweti’s alleged survival comes from Kenneth Kimaiyo, a former internal auditor at KUSCCO. Notably, there are no publicly available records, such as obituaries or official death announcements, confirming Basweti’s passing.

Some confidential sources have also suggested that Basweti is alive, though independent verification is still pending.

If Basweti is indeed alive, it could significantly impact the legal proceedings and the credibility of the PwC audit.

The former KUSCCO management may use this revelation to challenge the audit’s findings, arguing that the misuse of Basweti’s signature was either fabricated or misrepresented.

This could lead to calls for a re-examination of the forensic audit and potentially exonerate some of the accused.

Implications for the Case and KUSCCO’s Future

The unfolding developments surrounding the KUSCCO scandal highlight the challenges of investigating complex financial crimes, particularly when key individuals and evidence are shrouded in mystery.

The possibility that Basweti is alive not only raises questions about the accuracy of the PwC report but also underscores the need for thorough and transparent investigations in such high-stakes cases.

As the legal proceedings continue, the status of Basweti and the credibility of the PwC audit will likely remain central to the case.

The outcome could have far-reaching implications for KUSCCO, its stakeholders, and the broader cooperative movement in Kenya.

For now, the Sh13 billion heist remains a cautionary tale of financial mismanagement and the importance of accountability in safeguarding public funds.

The story of the KUSCCO scandal is far from over, and as new details emerge, Kenya Insights will continue to follow the developments closely, providing in-depth analysis and updates on this unfolding saga.