Sacco tower to be sold over Sh550m bank loan

Moi University Staff Cooperative (MUSCO) members led by mzee Joseph Morenga demonstrate to protest against the mismanagement of their Sacco funds by the officials in Eldoret. [Peter Ochieng, Standard]

Over 3,000 Moi University workers will lose their investment when a Sh340 million building owned by their sacco is auctioned.

The High Court in Eldoret has allowed the Cooperative Bank of Kenya to sell Musco Towers, owned by Moi University Savings and Credit Cooperative Society (Musco), to recover a Sh550 million loan.

The nine-storey building is located in Eldoret Town and sits on a 0.11 acre plot.

In her ruling, High Court judge Justice Hellen Omondi noted that documents produced in court had proved Musco obtained the loan between 2008 and 2016, but failed to pay back.

She said she was persuaded by the argument raised to the effect that Musco and the bank entered into an agreement on the basis of which Musco Towers was advanced funds on the promise to repay.

“What I have gathered since the beginning of the case is that the bank issued several demands and statutory notices which were ignored. Furthermore, on five separate occasions, the bank allowed Musco to renegotiate the loan but nothing was done,” Justice Omondi said.

The workers are shareholders of Musco Towers.

Last year, members of the troubled sacco staged peaceful demonstrations in Eldoret Town to oppose the planned sale of Musco Towers without their involvement.

They claimed they spent Sh400 million, through savings and a bank loan, to put up the structure in Eldoret’s Central Business District and will not accept the planned auction of the property.

In November last year, the High Court granted a 40-day leave to the management of the sacco to negotiate a way out with the bank.

The auction had been set to go down on October 30 last year before it was stopped by a court at the eleventh hour following a petition.

The members of the sacco, who include teaching and non-teaching staff, said they will now seek the intervention of Parliament in a bit to save the property from falling under auctioneers hammer.

The sacco also draws its membership from the University of Eldoret and Moi Teaching and Referral Hospital.

Records show Musco Towers has two basement floors, seven fully-let shops on its ground floor, including an ATM lobby, and 14 offices in its mezzanine-floor that are occupied.