A legal battle over the future of the Kenya Union of Savings and Credit Cooperatives (KUSCCO) has moved to the Milimani High Court, with the court allowing the matter to be heard urgently amid concerns over members’ funds.
The court issued the directions on Friday, September 4, after considering an application filed under a certificate of urgency.
The case will be heard during the ongoing court recess, bringing the liquidation process under immediate legal scrutiny.
In its directions, the court ordered that the application be served on all parties involved, including the liquidators appointed to oversee the winding-up of KUSCCO and any other individuals who could be affected by the orders being sought. Those served have been given an opportunity to respond before the case comes up for further hearing on Tuesday, September 8.
The court intervention comes only days after the government cancelled KUSCCO’s registration and placed the organisation under liquidation. The decision was contained in a Gazette Notice published on August 31, which cited liquidity challenges that had affected the union’s operations.
Three officials from the State Department for Co-operatives were appointed as liquidators for a period of up to one year. Their responsibilities include taking control of KUSCCO’s property, financial records and other documents needed to complete the winding-up process.
The move has raised wider questions about the future of an organisation that has played a major role in Kenya’s SACCO sector. KUSCCO has for years provided services to savings and credit co-operatives, while also serving as an important link between SACCOs and other stakeholders in the sector.
The government had already announced plans to change the structure of KUSCCO before the liquidation decision. In July, plans were unveiled to convert the organisation into a federation that would concentrate on governance, oversight and supporting SACCOs rather than continuing with financial services.
The proposed reforms came as KUSCCO faced increased scrutiny over financial and governance problems. Particular attention has been drawn to a reported Ksh13.3 billion financial scandal, with stakeholders raising concerns over the management of funds and the possible impact on SACCO members.
The latest court case therefore comes at a sensitive time for members and institutions that have financial interests linked to KUSCCO. The liquidation process could affect how its assets, records and financial obligations are handled, making the court’s decision an important step in determining what happens next.
The appointed liquidators remain under scrutiny as the parties prepare their responses ahead of the September 8 hearing. The court’s eventual decision could determine whether the liquidation proceeds as planned or faces further legal hurdles, while SACCO members wait for clarity over the safety and status of funds connected to the troubled union.
