Parliament has summoned the Capital Markets Authority (CMA) over the National Social Security Fund’s (NSSF) involvement in questionable bond transactions in which Sh2 billion is feared lost.
The National Assembly’s Finance and National Planning committee heard that the Central Bank of Kenya (CBK) last year flagged the questioned investments transaction and alerted the CMA on August 19, 2023.
CBK Governor Kamau Thugge told lawmakers that the banking sector regulator only received a response from the CBA on March 5, 2025, requesting additional information on the NSSF investments in the stock market.
Committee chairperson and Molo MP Kuria Kimani asked to know the action taken by CBK on Auditor-General Nancy Gathungu’s findings that the NSSF traded with a local bank in a transaction that is likely to see the public pension fund lose Sh2 billion.
Ms Gathungu in her report for the financial year 2023/24 said NSSF sunk millions of shillings of pensioners' savings in investments in cash-strapped companies.
She revealed that most of the investments were pumped into the stock market and non-existent housing projects. Claims of improper dealing in bonds by the NSSF involving two CSD accounts of NSSF, those of an individual and a local commercial bank, came up last year having been flagged by the CBK.
The CBK in the August 19, 2024 letter to CMA Chief Executive Wycliff Shamiah questioned the deals on the bond transaction through the NSSF CSD accounts and those of Mr Humphrey Wachira Gichuru and Pergamon Investment Bank Ltd.
“The Central Bank of Kenya would like to bring to your attention some irregular trades carried out between May to July 2024 between NSSF Kenya, Humphrey Wachira, and Pergamon Investment Bank Limited,” reads the letter signed by David Luusa, CBK’s Director of Financial Markets Department.
“The purpose of this letter is to request the CMA to review the conduct of the above-mentioned parties and share the actions taken with the Central Bank of Kenya,” said Mr Luusa.
The CBK’s analysis of the trades between the parties indicates that NSSF Kenya was buying bonds at significantly higher prices than the market average “while in some cases, NSSF Kenya sold some bonds at lower prices and bought the same bonds at higher prices in a few days,” it added.
Mr Shamiah was required to contact CBK’s deputy director in charge of Debt Management for specific transaction details relating to the NSSF’s bonds trades but he was not available to explain the steps taken to address the concerns raised by CBK.
Through its Financial Reporting Centre (FRC), CBK is able to flag and report suspicious dealings in the banking industry.
“We are the ones who alerted the CMA on August 19, 2023, to give them information about the matter. We gave them information on NSSF and two other entities,” Dr Thugge said.
“We gave them information between May and July and we wrote to them on August 19, 2023. Ask them why the CMA why the matter has not been dealt with to date.”
Dr Thugge said the CBK on March 5, 2025, received a letter from the CMA requesting information on the NSSF transactions between September 2023 and September 2024 “which we should provide to them.”
Mr Luusa, who is Dr Thugge’s alternate director at the CMA board, told the committee to seek further information from the CMA management.
“On the issue of listed securities at the NSSF, I sit on the board and not management. Management will be able to explain. As the government said, they have requested additional information,” Mr Luusa said.
Mr Kimani said the committee will summon the CMA to appear before it to shed light on the NSSF investments transactions.
“This committee will write to them to appear before us and shed light on these NSSF dealings where pensioners are feared to have lost up to Sh2 billion,” Mr Kimani ruled.
Dr Thugge and his team appeared before the committee to explain the steps undertaken by the regulator to ensure the pronouncements of the Monetary Policy Committee (MPC) have an effect on the operations of commercial banks.
The committee also sought to know the status of the implementation of the new core capital requirements of Sh10 billion.
