Members Drag Kenya Bankers SACCO to Court Over Alleged Ksh 2.9 Billion “Breach of Trust”
Posted by EDITORIAL
Two members have sued Kenya Bankers SACCO at the Milimani High Court, alleging hidden liabilities, inflated projects, insider control, and governance manipulation that they say cost members over Ksh 2.9 billion. Here is what the petition reveals.
Nairobi Kenya
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IN SUMMARY
Two Kenya Bankers SACCO members have filed a petition at the Milimani High Court accusing the SACCO’s leadership of concealing liabilities, inflating project costs, manipulating governance structures, and enabling insider control — losses they estimate at more than Ksh 2.9 billion. They are seeking a forensic audit, suspension of officials, criminal proceedings, and restoration of democratic member oversight.
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Two long-standing members of the Kenya Bankers SACCO have moved to the Milimani High Court in a case that could redefine accountability in Kenya’s cooperative sector. Filing their petition earlier this week, Davies Mbaabu Kajogu and Joakim Simiyu accuse the SACCO’s leadership of presiding over years of concealed liabilities, inflated project expenditures, insider appointments, and governance changes that locked out ordinary members from oversight. They describe the situation as a calculated erosion of trust that has exposed thousands of Kenyan savers to unprecedented financial risk, estimating total member losses at more than Ksh 2.9 billion.
“This is a breach of trust at the highest level,” they said in their filing. “Members have sacrificed for years, only for a select few to misuse power and conceal the truth.”
According to the petition, the SACCO’s leadership allegedly hid a Ksh 200 million loan from KUSCCO for almost a decade, only to quietly shift the liability to members in 2023. Another Ksh 600 million guarantee was reportedly buried in audited accounts, leaving members unaware of the risks placed on their savings. The petition highlights additional inconsistencies, including unexplained governance expenses amounting to Ksh 40 million, a missing Ksh 10 million from a Syokimau land transaction, and major losses tied to the Shaba Housing Project. The project, which had been approved at a much lower budget, is said to have overshot by Ksh 722 million, ultimately resulting in Ksh 389 million in losses borne by members.
“We are fighting for transparency, justice, and the restoration of faith in cooperative finance. This is bigger than us — it’s about protecting every Kenyan who relies on the cooperative movement.”
The petitioners further argue that the SACCO leadership systematically dismantled democratic participation by moving from full-member AGMs to a delegates’ system—a shift they believe was designed to reduce scrutiny. They also challenge new bylaw requirements demanding Ksh 2 million in savings and Ksh 120,000 in share capital for any member seeking leadership positions. According to their filing, this effectively pushed out 99% of members, especially youth and low-income contributors, and concentrated control in the hands of a powerful few. They also point to alleged nepotism, claiming that key positions were filled by relatives of board members without competitive recruitment, in violation of the Employment Act and constitutional principles of fair access and merit-based hiring.
One of the most contested issues in the petition is the appointment of CEO Lucas Ondong Otieno in 2022. The petitioners argue that his rise to the top office, without a transparent and competitive selection process, entrenched insider control. They note that Mr. Otieno previously served as Honorary Secretary at the time the concealed KUSCCO loan was taken, raising concerns about accountability and conflict of interest. The petition also questions the silence of regulators, including SASRA and KUSCCO Ltd., which the members accuse of ignoring warning signs. The external auditor, Kreston KM & Company LLP, is alleged to have overlooked or failed to disclose critical financial irregularities, thereby contributing to prolonged opacity.
In their petition, the members are urging the court to suspend the SACCO’s entire board and the CEO, order a forensic audit covering the period from 2013 to 2025, and initiate criminal investigations targeting any officer implicated in wrongdoing. They are also seeking Ksh 5 billion in compensation for cumulative member losses and calling for the reinstatement of a fully democratic governance system that restores decision-making power to the broader membership. They describe the case as a fight not just for financial justice, but for the integrity and future of cooperative finance in Kenya. Their message is clear: the cooperative movement cannot thrive when trust is broken, voices are silenced, and accountability is compromised.
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Video Footage Credits: Joakim Petitioners
