BY SAM ALFAN.
A lobby group has moved to court to stop further disbursement President William Ruto’s Hustler Fund claiming that the kitty was launched without following the law.
Operation Linda Ugatuzi ,lawyer Benard Okello and Kelvin Macharia says the court should put a freeze on further disbursements of the funds arguing that no board has been established to manage the fund as contemplated by the Regulations.
They want the court issue conservatory orders suspending implementation of the Legal Notice no. 213 and by extension the Financial Inclusion Fund.
They further seeks the court to issue orders directing Social Security Fund be ordered to confirm the qualification or registration of the citizens whose already borrowed funds from the Financial Inclusion Fund have already been forcefully applied into unknown pension schemes.
“The Court be pleased to issue orders of stay against the National Assembly from convening any siting to appropriate funds to the Financial Inclusion Fund in the absence of the advisory board contemplated under regulation 10 of the Public Finance Management (Financial Inclusion Fund) Regulation 2022 pending hearing and determination of the case,” they urged the court.
The fund was established by Treasury Cabinet Secretary through a legal notice in a Public Finance Management (Financial Inclusion Fund) Regulations 2022 and the same was launched by President Ruto on 30th of November 2022 who announced that the capital amount for the fund currently stands at Sh50 billion.
“Unless this court issues orders of stay against further role out of the Financial Inclusion Fund pending the hearing and determination of this application, the legislations enacted pursuant to the constitutional provisions on public finance stand to be violated irreparably to the detriment of the current citizens of the Republic of Kenya and future generations,” they told the court.
They however claims the cabinet secretary has not appointed a Chief Executive Officer as required under regulation 14(1) nor approved the estimates of expenditure and revenue.
In the documents, they have mentioned several Telecommunication companies and banking institutions including Central Bank of Kenya, Safaricom PLC, Kenya Commercial Bank, Airtel Kenya, National Security Funds and Retirement Benefit Authority as interested Parties in the suit while the Attorney General.
The lobby group adds that despite the said fund being stated to have been removed from the consolidated fund without following the due process enshrined in the law, the president has indicated that a further role out of the second phase of the fund is to be released to the public soon.
The lobby group says a public fund of over one hundred billion will be unaccounted for out of the consolidated fund for lack of proper administrative mechanisms to safeguard the same.
The group further says there has not been any appropriation by the national assembly as per Regulations 4, 5 and 6 of the regulations.
The lobby group wants the court to order the government to provide information about the source of the funds that have been currently disbursed under the financial inclusion fund.
They also want the court to issue an order freezing penalty and or negative repercussions being visited upon any citizen that has already borrowed and or withdrawn money from the Hustler Fund platform.
The lobby group also seeks to suspend the legal notice and also a declaration that the president acted ultra vires by launching the role out of the fund without constitution of the advisory board as established under regulation 10.
They also want the court to compel the Controller of Budget to reveal the source of the funds and account for all the money that has been disbursed.
According to the lobby group, further role out of the fund as current stands is an abuse of office and violation of constitutional principles of public finance and leadership and integrity principles under the constitution of Kenya.
They argue that regulation 14 provides for the office of the Chief Executive Officer of the Fund who shall be competitively appointed by the Cabinet Secretary responsible for matters relating to Micro, Small and Medium Enterprises upon recommendation by the Board.
They further argue that regulation 16 provides for a secretariat of the fund which shall be headed by the chief executive officer and that the staff of the secretariat shall be competitively appointed.
Regulation 17 of the Regulations provide that the Administrator of the Fund shall be the Chief Administrator of Executive
Officer appointed under regulation 14(1) and in administering the Fund, the Administrator of the Fund shall open and operate such bank accounts with the approval of the Board.
The National Treasury, supervise and control the day-to-day administration of the Fund and in consultation with the Board, develop such policies as may be necessary for the attainment of the objects and purpose of the Fund.
Further consult with the Board on matters relating to the administration of the Fund and e. cause to be kept books of accounts and other books and records in relation to the Fund of all activities and undertakings financed from the Fund and with the approval of the Board, outsource services and enter into and sign commercial contracts or agreements in furtherance of the objects and purpose of the Fund and be the custodian of the assets and properties of the Fund.
It also indicate they open loan accounts of all successful applicants or financial intermediaries and maintain a record of the amount disbursed and the balance thereof and prepare, sign and transmit to the Auditor-General in respect of each financial year and within three months after the end thereof, a statement of accounts relating to the Fund and showing the expenditure incurred from the Fund, and such details as the Public Sector Accounting Standards Board may prescribe from time to time , in accordance with the provisions of the Act and Public Audit Act, 2015.
