Former chief executive officer of Insurance Regulatory Authority (IRA) Sammy Makove, former Statutory Manager John Sifa Leah were on Tuesday July 21, charged with an attempt to defraud the company.
The charges placed against them indicated that they attempted to defraud the company between July 5, 2015 and July 31, 2016 by planning to dispose of its building known as Blue Shield Towers in Upper Hill, Nairobi.
The court was told that a moratorium was in place and the plan to sell the building which was under receivership at the time had not been approved by the statutory management.
The company was placed under receivership in September 2011 and Mr Makove, who was then the Commissioner at IRA, appointed two statutory managers to manage the company.
According to reports, John Sifa Keah was further charged with Eliud Muchoki Muriithi, also a former statutory manager, with stealing Sh10.2 million belonging to the underwriter, money which came into their possession by virtue of their employment.
The case against the three has been pending for more than five years with push and pull between the office of the Director of Public Prosecutions and the Directorate of Criminal Investigations. In 2016, the DCI requested for an inquiry into alleged misappropriation of funds and assets of Blue Shield Insurance Company limited, which has been under statutory management since 2011.
This followed a special audit, which was conducted from May 13, 2016 to July 29, 2016.
A report of the Auditor General in August 2016 faulted Mr Makove for appointing the statutory managers without documenting objective criteria to assure that he was the most qualified statutory manager.
The report also said the Commissioner did not state the basis upon which he determined the remuneration of the statutory manager and the managers further failed to put in place standard operating procedures to guide the finance and procurement operations.
Blue Shield was incorporated in December 4, 1982 and all was well until September 2011 when it was placed under receivership. Mr Muriithi appointed its first statutory manager.
Upon the expiry of his term, the Commissioner of Insurance appointed Policyholders Compensation Fund as the second statutory manager at a fee of Sh500,000 per month.
The trio denied the charges and pleaded with senior principal magistrate Kennedy Cheruiyot to release them on cash bail. The accused persons said they brought themselves to court after being released by police officers on cash bail of Sh100,000.
Mr Makove said he was a retired civil servant and a senior citizen and had no intention of jumping bail. Mr Cheruiyot adopted the amount they posted at the police station. The case will be mentioned on August 4 for pre-trial.