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The High Court in Eldoret has granted a 40-day notice to Moi University Staff Cooperative Sacco (Musco) to pay Sh500 million outstanding debt or face auction.

Justice Hellen Omondi yesterday noted Co-operative Bank will be at liberty to proceed with the sale of the Sacco property upon the lapse of the notice in the event of default in clearing of the arrears.

“The defendant shall apply the proceeds of the sale towards the setting of the outstanding debt and that the balance of the proceeds shall be remitted to the plaintiffs’ for the distribution to Musco creditors,” she ruled.

She further added that the matter shall be marked as settled after parties file consent agreement in court.

SEE ALSO: Laikipia saccos to access loans at 5pc

Last week, members of the Sacco moved to court seeking an injunction to stop the bank from auctioning the Musco Towers building in Eldoret town due the outstanding debt.

The auction, which was set to go down on October 30, was temporarily stopped at the last minute.

As the court was giving its directions yesterday, Justice Omondi noted that a construction company wanted to be enjoined in the case.

Dinesh Construction Limited sought to be enjoined in the case claiming it was not fully paid after construction of the building.

Citing an application date September 27, 2018, the firm claimed arbitration tribunal awarded it Sh141 million in 2015.

SEE ALSO: Co-operative Bank acquires Jamii Bora Bank LTD

The Sacco is said to have challenged the tribunal's decision but failed at the High Court, leaving the award in force.

“The applicant was unable to locate any movable assets belonging to Musco and thus has been unable to execute the said judgement,” said Omondi.

However, the judge noted the construction firm cannot be enjoined in the suit since it had entered a compromise with Cooperative Bank and advised the firm to pursue the matter separately.

The members have faulted a liquidator appointed by the Commissioner of Cooperative to oversee daily operations of the troubled Sacco for keeping members in darkness on its operations for the last five years.

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Moi University Staff Cooperative Sacco Musco Moi University Co-operative Bank
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