MPs are probing Safaricom Investments Co-operative (SIC) over fraud allegations that have seen its members lose millions in investment capital.
According to revelations by the National Assembly's Finance Committee chairman Kimani Kuria SIC did not undertake thorough due diligence before entering into an agreement with the real estate developer Sycamore Pine Limited in 2020, exposing members to potential financial risks.
The Molo MP told the House that in 2020, SIC entered into a contract where they would earn a 4.5 percent commission for each unit sold.
The Samara project stalled in 2021 on court orders after the residents of Migaa Estate opposed the construction of high-rise apartments within their neighbourhoods.
The House further heard that, Sycamore Pine Limited, a company registered in October 2019, lacked the complete documentation required for the Samara Estate Development project at the time of the agreement.
This saw Safaricom Investments terminate the agreement of the 1,200 units that were to be constructed.
“A list of eight Kenyans paid a deposit of between Sh790, 000 and Sh1.6 million. But from 2021 neither Safaricom nor Sycamore had refunded the money by the purchasers as of 15th October 2023,” said Kuria.
In the agreement, once SIC identified a customer, the customer was required to sign purchase agreements with Sycamore Pine Limited and deposit a minimum of 20 percent of the funds directly into the developer's account.
A two-bedroom unit was priced at Sh2.95 million, while a three-bedroom unit was sold for Sh3.95 million. Following the project's suspension in August 2021, investors in the project have been demanding refunds, alleging fraud.
Since its establishment in 2009, SIC has attracted over 5,000 members in Kenya and the diaspora.
In 2022, the company reported a 37 percent increase in profits, reaching Sh276 million.
Many Kenyans working abroad have shared distressing experiences involving the loss of substantial property investments back home.
These unfortunate incidents include falling victim to fraudulent property companies and facing exploitation by relatives and individuals who take advantage of their absence.
