The state takes over Ekeza SACCO after liquidation.

A truck advertising Ekeza Sacco / COURTESY.

Barely two weeks after its de-registration, the government has taken over the operations of Ekeza SACCO in an effort to protect thousands of investors.

The liquidation process will take one year upon which the cash realised will be used to pay depositors.

The Sacco is estimated to have signed up 50,000 members who deposited some Sh2.56 billion.

This fresh order sets aside an earlier directive that deregistered Ekeza pending streamlining of its operations to suit Sacco requirements. The commissioner had ordered the Sacco to close down all its 26 offices countrywide until it complied with the law.

This means that Ekeza’s offices have been shut down and its operations taken away from directors to facilitate termination of its operations. This will see its assets sold and money in its accounts taken out to repay creditors. Anyone found liable could face criminal prosecution or be surcharged.

Commissioner of Co-operatives Mary Mungai said compulsory liquidation was necessitated by findings of an investigation that revealed Ekeza had failed to meet its members’ expectations.

The directive also saw appointment of two liquidators, assistant director of co-operative audit Stephen Kamau and principal co-operative officer Philip Ukhevi, to oversee the process within the next one year.

“I authorise them to take into their custody all the properties of the said society including such books and documents as are deemed necessary for completion of the liquidation,” she said.

Liquidation is the process of converting company assets into cash, for instance, by selling them, to pay a debt.

Mungai has advised anyone aggrieved by the decision to close down the Sacco to register their complaints with the Cabinet secretary Ministry of Industry, Trade and Co-operatives.

“Whereas, an inspection was conducted into the affairs of Ekeza Sacco Society under Section 61(1). Any member of Ekeza Sacco Society aggrieved by this order may, within sixty (60) days from the date this order is published in the Kenya Gazette, appeal to the Cabinet Secretary responsible for Co-operative Development,” said Mungai.

In court papers filed last week by Ekeza’s CEO Gladys Wanjiku Muriithi, the Sacco said it was in the process of separating its operations from its sister firm Gakuyo when its licence was revoked.

Ekeza’s members had to part with Sh. 10,000 as booking fee for a house and continue saving money for selected houses, which saw member savings rise to Sh2.56 billion while housing loans currently stand at Sh2.6 billion.

The Sacco was founded in 2014 and an AGM held on September 17, 2016. The second AGM was shelved due to a hostile political climate before the 2017 General Election and on the advice of the commissioner, Muriithi said.