A single Sacco with a Sh108.8 million judgment against the Kenya Union of Savings and Credit Co-operatives (KUSCCO) has forced the High Court to pause the government’s liquidation of the troubled apex body, days after a Gazette Notice put three officials in charge of winding it up.
Justice Rhoda Rutto certified as urgent an application filed by RUPSA Regulated NWDT Sacco Society Limited, formerly PCEA Ruiru Sacco, and directed that it be served on KUSCCO, the appointed liquidators and the Commissioner for Co-operative Development by close of business on September 4. The judge set September 8 for further directions on when the application itself will be heard, and gave the respondents room to file replies if they wish.
The order, issued during the court recess, keeps the liquidation process in legal limbo just as the Commissioner’s appointees were due to begin taking custody of KUSCCO’s assets, books and records.
A gazette notice that arrived mid-injunction
RUPSA’s case rests on timing. The High Court, through Justice Freda Mugambi, issued preservatory orders on March 25 barring KUSCCO from disposing of assets or transferring shares in its subsidiaries. Justice Bernard Wafula Murunga extended those orders on June 25. Both remain in force, carrying a penal notice that warns of contempt proceedings for anyone who breaches them.
On August 31, while that injunction stood, Commissioner for Co-operative Development David Obonyo published Gazette Notice No. 13997, cancelling KUSCCO’s registration and appointing three people, CPA Peter Wanjohi Kiama, Habif Olembo Jesse and Mariann Adam Abubakar, as liquidators with immediate authority to take custody of the union’s property.
The move followed a Special General Meeting on August 28, where roughly 250 member Saccos voted to dissolve KUSCCO under the Co-operative Societies Act rather than inject fresh capital, a decision Khusoko and other outlets reported extensively at the time.
RUPSA’s advocates, Allan Mulama Advocates, argue that the Commissioner never sought the court’s permission before publishing the notice, and that an administrative order cannot override a standing injunction. Their skeleton submissions put the point bluntly: a court order binds until it is varied or discharged, and “the shepherd has appointed himself undertaker.”
The firm wants the Gazette Notice set aside, an independent, court appointed provisional liquidator installed under Section 449 of the Insolvency Act, and the Commissioner’s appointees called to explain, on affidavit, whether they knew about the standing orders when they moved anyway.
Why one appointment worries the petitioner
The application singles out CPA Kiama. He serves as Deputy Commissioner for Co-operative Development, was seconded to KUSCCO as Acting Chief Executive Officer in January 2026, and is now named as the union’s lead liquidator, a sequence RUPSA says leaves the regulator investigating, and now winding up, an institution one of its own deputies helped run. Section 65(3) of the Co-operative Societies Act requires liquidators to be authorised insolvency practitioners, a qualification RUPSA says none of the three appointees holds.
The numbers behind the fight
KUSCCO’s financial position explains why creditors are moving fast. The union’s own figures, drawn from PwC and Grant Thornton reviews, show liabilities of roughly Sh17.7 billion against assets of about Sh5.2 billion, a deficit near Sh12.5 billion. Kenya’s Cooperatives Cabinet Secretary Wycliffe Oparanya told the Senate in May that losses at the union exceeded Sh13 billion.
One hundred seventy seven creditor Saccos are owed a combined Sh6.17 billion. Recoveries so far total around Sh369 million, a rate of roughly 6 percent, and RUPSA says it has not received a shilling of its own award. The union also carries intercompany loans of about Sh6.27 billion spread across five subsidiaries, funds RUPSA’s advocates say an administrative dissolution cannot trace, unlike a liquidation supervised by the High Court, which can investigate director conduct and unwind improper transfers under the Insolvency Act.
RUPSA also flags continued spending on travel and conferences, including promotion of the SACCA Congress 2026 in Dar es Salaam this October, at a time when the union owes billions to unpaid creditor Saccos.
What happens next
Nothing is decided yet. Friday’s ruling only fast tracks the case and requires service on affected parties; the substantive prayers, including whether to freeze the liquidators’ powers and appoint an independent administrator, will be argued when the matter returns before Justice Rutto on September 8. KUSCCO, the Commissioner and the named liquidators have not yet filed public responses.
The case adds a legal front to a liquidation that has already drawn scrutiny from Kenya’s cooperative sector, coming three days after the Gazette Notice and barely a week after member Saccos voted to dissolve the 53 year old union. How the court resolves the clash between its own preservatory orders and the Commissioner’s statutory powers will shape not just KUSCCO’s fate, but the ground rules for future government interventions in distressed cooperatives.
