Role of Commissioner for Cooperatives questioned in Kuscco Sh13b saga

Delegates during the KUSSCO Limited's 8th Annual Sacco Leaders Convention at Sarova Whitesands in Mombasa, on February 21, 2023. [File, Standard] The role of the Commissioner for Cooperative Development in the Kenya Union of Savings and Credit Cooperatives (Kuscco) scandal has been questioned as affiliated societies' officials fight a directive to dismiss them from office. A directive from the Commissioner for Cooperative Development that roped in the courts in December 2024 sought to have former Kuscco board officials be barred from holding any position in the Sacco societies due to their dismissal from the union. This followed the disbandment of the Kuscco board by the then Cooperatives and Micro, Small and Medium Enterprises Development Simon Chelugui in May 2024. However, the officials, who are directors and executives in Kuscco member Saccos, have refused to go down without a fight in affidavits that now put the role of the Commissioner for Cooperative Development, a position that is currently held by David Obonyo, at the centre of the Sh13 billion saga. In one of the affidavits, Andrew Ayarah Okwach argues that officials can only be removed through the by-laws of their primary Saccos and not a directive from the Commissioner for Cooperative Development. He dismisses the directive that had him and others declared unfit to hold office while further questioning the role of the Commissioner for Cooperative Development in the Kuscco scandal. In the affidavit dated March 26, 2025, he argues that the misappropriation of funds at Kuscco happened under the nose of the Commissioner for Cooperative Development who had a representative on the board. He says it is the office of the Commissioner for Cooperative Development that was approving Kuscco books. "That upon conducting the review of the financial status of Kuscco by the first respondent (Commissioner for Cooperative Development), the office did approve the audited financial books of accounts to be accurate," says Okwach in the affidavit. The affidavit adds that this position is accurately captured in the books of account for the year 2021 and 2022. "It is also worth noting that the said audit was conducted by Omenye & Associates duly approved by the first respondent to conduct the audit," it adds. The affidavit notes that despite the Commissioner for Cooperative Development being a member of the board of Kuscco, at no point did he ever claim that the union entity was operating illegally. "In addition, the first respondent attends the annual delegates meeting and has never raised any issue as to actions of illegality and need to obtain requisite licences," it adds. The Commissioner for Cooperative Development is said to have written to specific Saccos whose officials were elected members of Kuscco that following their dismissal from the umbrella union, they should also not hold office in their primary Saccos. The directive affected 13 Saccos but was later stayed by court in a judicial review case. Kuscco already has a new board inaugurated by the Cooperatives and MSME Development CS Wycliffe Oparanya last week. The 11-member board is chaired by David Mategwa, who is also the Kenya National Police DT Sacco board chairman-which does not sit well with the former directors. Mategwa was a former Kuscco board member but was forced to resign in 2019 for lacking a KCSE certificate. His subsequent appeal to the Co-operative Tribunal to stop his ejection was dismissed. "Despite the Kenya Police Sacco, which he chairs, being under investigations for embezzlement, Mategwa was appointed chair of the 15-man Kuscco board to head restructuring," one of the former directors told The Standard. The High Court ruled in March that the Sacco Societies Fraud Investigations Unit should handle the probe on Police Sacco, overriding previous orders that had granted the Directorate of Criminal Investigationsauthority to investigate the case. Oparanya, on inaugurating the board, said the members are tasked with restructuring Kuscco, recovering assets and preparing Kuscco's transition into a federation. Already, the current management led by CEO Arnold Munene has embarked on disposal of some assets to offset some of the losses. This includes the union's vehicles that were offered for sale on cash basis. "We would like to inform you that the union is offering vehicles for sale at the below listed prices. The sale will be on cash only basis at specified prices. For those interested in viewing the vehicles, they are available at the Kuscco basement," said a memo to staff. Kuscco also advertised for sale several properties around the country including a housing estate in Kajiado County put up under the Kuscco Housing Fund. Assets of affiliate company Kuscco Mutual Assurance Company are also set to be sold. The plan is to recover at least Sh8.8 billion in five years. Oparanya has previously said that Kuscco did not have the necessary licence to handle some of the business it was doing. He said Kuscco was meant to be an advocacy body, which explains the new plan to transition it into a federation.

Role of Commissioner for Cooperatives questioned in Kuscco Sh13b saga

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Role of Commissioner for Cooperatives questioned in Kuscco Sh13b saga

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