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Kenya: Pyramid Scheme Losers Won't Be Paid
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The Nation (Nairobi)
30 April 2008
Posted to the web 30 April 2008
Nairobi
The Government will not compensate depositors who lost billions of shillings in collapsed investment schemes.
The schemes were neither finance institutions nor banks and were, therefore, not under the direct supervision of the Central Bank of Kenya, Finance assistant minister Oburu Oginga said.
However, he said, the Government had taken steps including curbing the proliferation of the schemes, cautioning the public, setting up a taskforce and filing fraud cases against the promoters of the schemes.
Mr Franklin Linturi (Igembe South, Kanu) sought to be told if the minister knew that several Kenyans lost billions of shillings last year when the investment schemes, known infamously as "pyramid schemes" collapsed.
The MP also wanted to know what steps the Government was taking to compensate the affected depositors.
Illegal entities
Dr Oginga described the pyramid schemes as "illegal entities which CBK does not supervise." He added: "True, CBK froze accounts of some of the pyramid schemes, but we can only pay the affected investors following court orders."
Budalang'i MP Ababu Namwamba claimed the schemes had been sponsored by political parties to reap from Kenyans ahead of the General Election.
Mr Kiema Kilonzo (Mutito, ODM-K) said Vice-President Kalonzo Musyoka had in his campaigns last year promised that those who lost money in the collapsed schemes would be compensated. "He is now in the Government and could we know if that promise was a mere campaign gimmick?"
The VP concurred, but clarified that the Finance ministry was not responsible for statements made during campaigns.
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Central Imenti MP Gitobu Imanyara (CCU) asked how many pyramid scheme operators had been taken to court, while Vihiga's Yusuf Chanzu (ODM) said his constituents had lost about Sh40 million in the scandal.
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