The New Kenya Cooperative Creameries (KCC) announced that it has splashed Ksh1 billion in a modernisation plan of it’s various factories in the country.
Among the factories that have received a facelift include Nyahururu, Eldoret and Thika, according to Managing Director Nixon Sigey.
The MD says that the company’s market share improved from 23 per cent to 32 per cent while revenue shot up to Ksh4 billion in the past three years.
“The stability in the company after we kicked off the modernisation plan has aided us to improve our intake by 40 per cent and attracted more milk. Farmers’ earning has increased from Sh2.5 billion to Sh5 billion,” he said.
However, the modernisation plan does not add up, as the announcement comes just a year after the auditor general Edward Ouko announced a Ksh1.7 billion hole in its accounts.
Could the modernisation plan be a cover-up for the lost monies?
“In the circumstances, it has not been possible to confirm the accuracy and recoverability of trade and other receivable balance of Sh1,762, 200, 310,” said the auditor General, refering to the financial year ending June 2017.
The company in the audit also could not provide documents for audit verification of 49 properties with a value of Ksh1.9 billion. A number of properties belonging to the companies had also been registered to third parties, amounting to Ksh222 million.
“In the view of the foregoing, it has not been possible to confirm the valuation, ownership status and the security of properties and equipment balance of Sh2,125,360,155 as at June 2017,” added the report.
The report also found that the management could not account for unreconciled balance amounting to Ksh28.7 billion in addition to an unreconciled credit balance of Ksh46 million.
With such financial mess, it would be hard to believe the modernisation narrative, which is not being felt in the market.
Early this year, it emerged that the head of procurement for the company Jamleck Mwangi could have been doing business with the entity using proxy firms. The investigation died down, and a month later the modernisation story came up.