The auditors general report for the financial years ended 31st December 2021 and 2022 has revealed that Workers’ Compensation Fund Control Board (WCFCB) Invested K17 million into Shimaini Investment Limited, a company which did not demonstrate acceptable profitability and stability for three (3) consecutive years.
According to Clause 6.2.1 of the Investment Policy, The Fund may invest in equities of unlisted companies that demonstrate acceptable profitability and stability for three (3) consecutive years and have growth potential and value addition to the investment portfolio.
However, an examination of financial and other relevant records maintained at WCFCB Headquarters and selected stations for the period from 1st April 2019 to 31st December 2022 on 26th February 2021 revealed that the WCFCB Board approved the Investment of K17, 000,000 into Shimaini Investment Limited that had been posting losses from 2016.
The AG report also revealed that Shimaini Investment Limited that WCFCB invested in also defaulted on its June 2023 repayment of over K1 million.
The report further revealed that WCFCB failed to collect rental income of over K6 million.
“On 26th February 2021, the WCFCB Board approved the Investment of K17, 000,000 into Shimaini Investment Limited, a company which did not demonstrate acceptable profitability and stability for three (3) consecutive years in that they had been posting losses from inception in 2016. A review of the loan repayment records revealed that the company had defaulted on its June 2023 repayment of K1, 010, 000,” the report revealed.
“Section 13 of the Rental Policy stipulates that the rent and service charge shall be paid to the WCFCB or to its authorised agent quarterly or for any other period as stated in the lease agreement, in advance, free of exchange and bank charges, and without any deduction whatsoever on or before the first day of the month throughout the period of the lease. A review of documentation submitted for audit for the financial years 2020 to 2022 revealed that WCFCB had made a budget provision for rental income of K52, 395,175 towards which K46, 394,639 was received as income resulting in a variance of uncollected income of K6,000,536,” revealed the report.
