(NAIROBI, KENYA) – A Ruiru-based savings and credit cooperative society has moved to court to block the three liquidators appointed by the State to wind up the Kenya Union of Savings and Credit Co-operatives (Kuscco), arguing that the appointments threaten existing court orders protecting the umbrella body’s assets.
Rupsa Sacco, which is owed KES108.8 million ($667,484 / £548,000) by Kuscco, wants the High Court to stop the State-picked team and instead appoint an independent insolvency practitioner to handle the liquidation.
The High Court on Friday certified Rupsa’s application as urgent and ordered the parties to appear before the court on 8th September for further directions.
The dispute follows the publication of a gazette notice on 31st August, through which the Commissioner for Co-operative Development, David Obonyo, cancelled Kuscco’s registration and appointed Peter Wanjohi Kiama, Habif Olembo Jesse and Mariann Adam Abubakar as liquidators.
The gazette notice came after Kuscco members on 28th August voted to liquidate their umbrella body, arguing that this was the only way to ensure fair sharing of the assets left in the insolvent institution.
Rupsa argues that the notice was issued while preservation orders made by the High Court on 25th March and extended to 25th June were still in force. The orders, arising from Rupsa’s case against Kuscco, restrained the entity from disposing of, transferring, charging or otherwise dealing with its assets and shares in subsidiaries.
The sacco, formerly known as PCEA Ruiru Sacco, wants the three liquidators restrained from taking possession of or dealing with Kuscco’s assets, books, documents and records pending the hearing of its application. It is also asking the court to appoint an independent liquidator.
“Unless interim preservation orders are issued urgently, the respondent’s (Kuscco) assets, books, records and electronic information may be dealt with or placed beyond effective preservation before the application is heard inter partes, thereby rendering the existing preservatory orders and the Petition itself nugatory,” the sacco said in court papers.
Rupsa is particularly challenging the appointment of Mr Kiama, the Deputy Commissioner for Co-operative Development, as one of the liquidators. In the court papers, Rupsa says Mr Kiama was at some point seconded to Kuscco as acting chief executive on 29th January 2026.
The sacco argues that Mr Kiama’s previous role at Kuscco raises questions over the independence of the liquidation process. It further says none of the three people are authorised insolvency practitioners, which Rupsa argues is required under Section 65(3) of the Co-operative Societies Act.
Rupsa wants the High Court to appoint an independent provisional liquidator under the Insolvency Act to take custody of Kuscco’s assets, secure its records and investigate its financial affairs, including intercompany transactions.
The application asks the court to determine whether the 31st August gazette notice breached the existing preservation orders and, if so, be set aside with the imposition of such sanctions as are permissible in law.
Rupsa also wants Mr Obonyo and the three appointed liquidators to explain to the court the circumstances surrounding the gazettement, including whether they were aware of the existing court orders.
The court papers say Kuscco has five subsidiary companies with intercompany loans totalling about KES6.27 billion ($38.5 million / £31.6 million). Rupsa wants the proposed independent liquidator to investigate and report on the transactions and preserve the estate for creditors.
Court papers state that the organisation owes 177 saccos about KES6.17 billion ($37.85 million / £31.1 million), with recoveries of approximately KES369.3 million ($2.27 million / £1.86 million) having been made so far. The unpaid amount includes Rupsa’s KES108.85 million ($667,791 / £548,250).
The sacco says its concern is heightened by Kuscco’s financial position, with liabilities of about KES17.7 billion ($108.6 million / £89.2 million) against assets of approximately KES5.2 billion ($31.9 million / £26.2 million), leaving a deficit of about KES12.5 billion ($76.7 million / £63 million).
Rupsa has also raised concerns over Kuscco’s continued expenditure on conferences and international travel while creditors remain unpaid. The sacco cites Kuscco’s promotion of the Savings and Credit Cooperative Association Congress 2026 scheduled for October in Dar es Salaam, Tanzania, as an example.