By Eddah Waithaka
In a landmark legal action, two members have filed a Constitutional Petition against the Kenya Bankers SACCO Society Ltd, accusing its leadership of orchestrating a decade-long regime of systemic fraud, insider abuse, and gross regulatory negligence that eroded over Ksh 2.9 billion in member equity.
Petitioners Davies Mbaabu Kajogu and Joakim Simiyu took their fight to the High Court in Milimani, framing the case not as mere mismanagement but as a “coordinated assault on the financial dignity of thousands of hardworking Kenyans.”
“This is a betrayal of trust and a violation of our constitutional rights,” the petitioners stated. “We built this SACCO with our sweat and sacrifice. We will not let greed and impunity destroy it.”
A Pattern of Concealment and Financial Loss
The petition lays out a detailed pattern of alleged financial misconduct. It reveals that the SACCO leadership concealed a Ksh 200 million loan from KUSSCO for ten years before quietly transferring the liability to members in 2023.
Audited accounts also hid a Ksh 600 million guarantee, exposing members to massive, undisclosed risk.
The now-impaired Shaba Housing Project features prominently, with the petition alleging it consumed Ksh 722 million more than double its approved budget resulting in Ksh 389 million in losses for members.
The petitioners further allege that Ksh 40 million in governance expenses directly slashed member interest rebates and dividends, while Ksh 10 million from a Syokimau land sale simply “vanished without a trace.”
Systemic Governance Manipulation
Beyond the financial claims, the petitioners detail a deliberate strategy to suppress member oversight.
They argue the SACCO coercively transitioned from a full-member Annual General Meeting to a Delegates’ system, effectively silencing the majority.
Subsequent bylaw amendments erected what they call “discriminatory financial thresholds.” To qualify for board leadership, a member must now hold Ksh 2 million in savings and Ksh 120,000 in share capital, a move the petitioners say “deliberately disenfranchised 99% of the membership,” excluding youth and low-income earners.
Nepotism also allegedly flourished, with board members appointing relatives to key roles without competitive recruitment, violating the Employment Act and constitutional principles of meritocracy.
Insider Control and Regulatory Silence
A key allegation centers on the 2022 appointment of Mr. Lucas Ondong Otieno as Chief Executive Officer.
Mr. Otieno previously served as Honorary Secretary when the concealed Ksh 200 million KUSSCO loan was taken.
His appointment to the top role, made without a competitive process, “entrenched insider control and was designed to conceal past irregularities,” the petition states.
The petitioners also hold regulatory bodies accountable, accusing SASRA and KUSCCO Ltd. of failing to act on multiple red flags.
They further allege the external auditor, Kreston KM & Company LLP, played a “complicit role” in concealing material liabilities.
A Fight for the “Soul of Cooperative Finance”Through the petition, the members are demanding sweeping changes, including:· The immediate suspension of the SACCO Board and CEO.· A full forensic audit covering 2013 to 2025.· Criminal prosecution of culpable officials.· Compensatory damages of Ksh 5 billion for collective member losses.· The reinstatement of a democratic, member-led governance structure.”This is not just a legal fight,” the petitioners declared.
“It is a fight for justice, transparency, and the soul of cooperative finance in Kenya.” They are calling on the media, civil society, and the entire cooperative movement to stand with them as they pursue accountability.
