Court to hear Sonarwa case on loss of Rwf191m in January

Saturday December 24 2016

Sonarwa offices in Kigali. The firm, the oldest insurance company in Rwanda, has recently come under fire with multiple law suits. PHOTO | CYRIL NDEGEYA

Sonarwa offices in Kigali. The firm, the oldest insurance company in Rwanda, has recently come under fire with multiple law suits. PHOTO | CYRIL NDEGEYA 

By Moses K Gahigi

The court hearing of the case involving former executives of Sonarwa, has been set for January 12, 2017.

The former managing director of Sonarwa, Mawadza Nhomo, a Zimbabwean national and the company’s chairperson board of directors, Charles Mutsinzi Karake, were arrested early this year, for allegedly authorising illegal financial transactions to a tune of Rwf191 million.

The two were accused along with four others, Hubert Rumanyika, Stevenson Nzaramba, Gerard Mbabazi and Barnabas Rutagwabira, some of whom are insurance agents.

Information from the prosecution at the time of the arrests indicated that the accused got involved in a dubious tendering process to give insurance cover to a fleet of cars belonging to the Ministry of Infrastructure.

The insurance agents, Mbabazi and Rutabingwa, were accused of using fake documents in bidding for insurance contracts and taking a bribe from the deal, which they called commission.

Prosecution said, by virtue of Mininfra being a public entity, no commission was supposed to be paid on the transaction.

The embattled managing director and the board chairperson have since resigned from their posts at Sonarwa, with the company now doing its best to distance itself from them, in a bid to salvage its name.

“It is an individual case, it does not involve the company, you can talk to his lawyers, he is no longer working at Sonarwa, he resigned from his position,” said Arian Irakoze, the legal officer at Sonarwa, when asked to comment.

“The chairman of the board also resigned, the lawyers of Sonarwa are not involved in the case, for more information talk to the acting managing director, I am not in position to comment further,” Ms Irakoze said.

Sonarwa, the oldest insurance company in the country, established in 1975, has recently come under fire with multiple lawsuits, and unpaid customer claims, among which included garage owners. In 2008, a Nigerian firm acquired a 35 per cent stake in the company, effectively becoming the majority shareholder.

Some of the suspects in the case have already appeared before court in Gasabo District.

The accused had earlier applied for bail, which was subsequently denied by the high court, saying the reasons given were not convincing for them to get bail.

Although there has been some relative growth and stability, the times don’t look good for the insurance sector, which has got new entrants in the last few years.

Outstanding insurance claims have been growing over the past few years, data from central bank shows by December 2013, the sector had debts worth Rwf13 billion, this grew to Rwf16 billion in 2014, Rwf17 billion in 2015, and Rwf22 billion by September.

“Some issues have come to our attention from various insurance companies, some are technical, some involve unpaid claims, mismanagement, some are contractual, while others are fraud cases, we have put up committees to work on the cases” said Jean Pierre Majoro, the executive secretary of the insurance association in Rwanda.

The industry has recently come under scrutiny from the regulator for exceeding its investment limit in property, which threatened to deplete liquidity, which insurance companies need to have ready to settle customer’s claims. This has driven many to sell off their properties.