NAIROBI, Kenya, Sept 2 – The Commissioner for Co-operative Development, David K. Obonyo, has gazetted the liquidation of the Kenya Union of Savings and Credit Co-operatives Union Limited (KUSCCO) after the loss of billions of shillings through internal mismanagement.
The decision to liquidate the union was agreed upon by members after the umbrella body faced liquidity challenges.
According to the Business Registration Service, liquidation happens when a company’s assets are taken over for the recovery of debts owed to creditors, eventually leading to the closure of the firm.
“WHEREAS the Kenya Union of Savings and Credit Co-operatives Union Limited (KUSCCO) Limited (CS/2171), has failed to achieve its objects due to liquidity challenges and whereas KUSCCO members passed a resolution for KUSCCO to be dissolved pursuant to section 61 of the Co-operative Societies Act, Now therefore pursuant to section 62 (1) (c), I cancel the registration of the KUSCCO and order that it be liquidated,” Obonyo announced in a Gazette Notice.
“And further, pursuant to section 65 of the Co-operative Societies Act, the Commissioner for Co-operative Development do appoint CPA Peter Wanjohi Kiama, Deputy Commissioner for Co-operative Development, Habil Olembo Jesse, Principal Co-operative Officer and Mariam Adam Abubakar, Deputy Chief State Counsel, all from the State Department for Co-operatives, as liquidators for a period not exceeding one (1) year and authorize them to take into their custody all the properties of the said union including such books and documents as are deemed necessary for completion of the liquidation.”
About two years ago, a forensic investigation conducted on KUSCCO by PwC uncovered an estimated financial hole of between Sh12 billion and Sh13.3 billion at the union.
The losses were linked to ghost loans, falsified commissions and what the audit described as executive mismanagement.
The financial losses forced several SACCOs to write off millions of shillings invested in KUSCCO.
Stima DT SACCO wrote off Sh108 million, while Balozi SACCO wrote off Sh437.5 million and Afa SACCO Sh361.6 million, among others.
