- High Court temporarily halts KUSCCO liquidation.
- RUPSA NWDT Sacco is seeking recovery of KSh108.8 million.
- The dispute follows KUSCCO’s reported multi billion shilling financial shortfall.
The High Court has temporarily halted the liquidation of the Kenya Union of Savings and Credit Co-operative Societies Limited (KUSCCO), stopping liquidators appointed by the Commissioner for Co-operative Development from taking further action.
In a ruling, Lady Justice Rhoda Rutto barred the three appointed liquidators from exercising powers under the Gazette Notice that purported to appoint them to oversee the winding up of the umbrella co-operative organisation.
The case was filed by RUPSA NWDT Sacco Society Limited, which is seeking legal redress after losing Ksh108.8 million following KUSCCO’s financial collapse. Justice Rutto had last week certified the matter as urgent and directed the parties to proceed with the case.
How the dispute arose
The legal dispute arose after the Commissioner for Co-operative Development, David Obonyo, issued a Gazette Notice ordering the liquidation of KUSCCO following concerns over the organisation’s liquidity position and financial challenges. The liquidation order was published on Monday, August 31, 2026, under Gazette Notice No. 13997.
It followed a resolution passed by KUSCCO members during a Special General Meeting held on Friday, August 28, at All Saints’ Cathedral in Nairobi. Members approved the liquidation amid growing concerns about the union’s financial position.
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The Commissioner had appointed CPA Peter Wanjohi Kimani, Deputy Commissioner for Co-operative Development, Habil Omolo Jesse, Principal Co-operative Officer, and Marian Adam Abubakar, Deputy Chief State Counsel, as liquidators.
Court order pauses liquidation process
The three officials, drawn from the State Department for Co-operatives, were expected to oversee the liquidation for a period of up to one year. Their responsibilities included taking custody of KUSCCO’s property, books, records and other documents necessary to complete the process.
However, the High Court’s latest order has temporarily prevented them from proceeding with those functions as the legal challenge is heard. Liquidation generally involves taking control of an organisation’s assets and using them to settle outstanding debts to creditors, and depending on the outcome, the process can ultimately lead to the closure of the entity.
KUSCCO’s financial troubles have been linked to significant losses uncovered during a forensic investigation by PwC about two years ago. The investigation reportedly identified a financial shortfall estimated at between Ksh12 billion and Ksh13.3 billion, which it attributed to alleged ghost loans, falsified commissions and executive mismanagement.
The financial crisis has affected several Saccos that had invested funds with KUSCCO, with some forced to write off millions of shillings following the union’s financial difficulties.
By Obegi Malack
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