Ex-CS wants Sacco barred from auctioning farmers property
| Jul 12th 2019 | 2 min read
Former Sports and Heritage Cabinet Secretary Rashid Echesa has moved to court to block the intended liquidation of Nitunze Sacco, whose majority membership is farmers.
In a petition filed at the High Court, Mr Echesa and Ali Omondi Maliji jointly stated that the intended disposal of the farmers’ property was unlawful and meant to deny them their hard-earned money.
They sued the Sacco, the Commissioner for Cooperative Development and Valley Auctioneers after the commissioner placed the Sacco under receivership and intended to auction its land and building.
The petitioners say Sacco members, who are mainly sugarcane farmers, stand to lose millions of shillings in the exercise. They say the huge tract of land owned by the Sacco was given as a grant by the State, thus making it public property.
Mr Echesa maintains that Mosacco Plaza in Mumias has been hugely undervalued.
In their suit papers, the petitioners say Nitunze, previously Mosacco Ltd, was established in the 1970s as a savings scheme to enable sugarcane farmers access affordable loans. The Sacco expanded and bought over 50 pieces of land in Mumias town followed by construction of Mosacco Plaza, which cost every shareholder Sh2,000.
But due to the mismanagement of Mumias Sugar Company, the Sacco started performing poorly and was unable to meet its operational costs.
“Investigations reveal the Sacco management has purported to sell 20 of the 60 plots that were entrusted to them on behalf of the people of Kakamega and misappropriated the proceeds.
“To avoid such investigations, the respondents, in corroboration and collision, brought the issue of liquidation and, without good cause, caused a notice to be placed in the newspapers appointing liquidators,” the petitioners say. They contend that the liquidators, who advertised to auction the building on March 19, worked in secrecy, which amounted to defrauding the farmers.
“The Plaza was highly undervalued to Sh70 million when its current value is Sh500 million. The parcels are public land and cannot be sold to benefit a few individuals.”
But in a notice of preliminary objection, the respondents sought to have the petition dismissed. They told the court there were alternative dispute mechanisms as outlined in the Sacco Societies Act and the Cooperative Societies Act, which the petitioners by-passed.
The respondents also said Echesa was not a member of Nitunze Sacco, adding that the petition was an abuse of the court process.
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