In a major relief to over 3,000 members, the troubled Moi University Sacco Society Limited (MUSCCO) has been saved from liquidation following intervention by Cooperatives Cabinet Secretary Wycliffe Oparanya.
CS Oparanya announced the lifting of the liquidation order and reinstatement of the Sacco’s certificate of registration, describing it as “a critical step in restoring trust, protecting members’ savings and reaffirming the values of Kenya’s cooperative movement.”
The decision follows extensive consultations with MUSCCO members, recommendations from the Senate, and findings from a ministerial taskforce that has been reviewing the Sacco’s situation since December 2023.
Interim Leadership Appointed
An interim board of five members has been appointed to oversee MUSCCO operations pending elections for a substantive Board and Supervisory Committee within prescribed timelines.
However, CS Oparanya cautioned that the reinstatement should not be viewed as an endorsement of past failures. “This is a second chance anchored on strict expectations around governance, compliance and ethical leadership. Where culpability is established, accountability will be enforced without hesitation,” he warned.
A Decade of Turbulence
Founded in 1985, MUSCCO serves members from Moi University, University of Eldoret, Maasai Mara University, University of Kabianga, and Bomet University College, among other institutions. The Sacco was licensed as a deposit-taking institution by the Sacco Society Regulatory Authority (SASRA) in 2014.
The Sacco’s troubles began after it invested in MUSCO Towers, a landmark property on a 0.114-acre leasehold plot in Eldoret Municipality valued at Ksh 650 million as of 2017. The project was partially financed with a Ksh 200 million loan from the Co-operative Bank of Kenya.
However, severe liquidity problems emerged soon after completion of the towers, compounded by Moi University’s failure to remit member deductions from June 2015 onwards.
Controversial License Revocation
Despite showing signs of recovery by 2017, SASRA issued a notice in March 2018 indicating its intention to revoke MUSCCO’s license. In response, the Sacco submitted a detailed recovery plan that included the proposed sale of MUSCO Towers via public tender scheduled for June 28, 2018.
Controversially, SASRA proceeded to revoke the license on June 27, 2018—just one day before the planned sale. The then Commissioner for Co-operative Development, Mary Mungai, cancelled MUSCCO’s registration and appointed liquidators to take custody of the Society.
Legal Battles and Blocked Interventions
MUSCCO’s attempts to challenge the liquidation through judicial review were dismissed on procedural grounds, with the Sacco being advised to exhaust administrative channels first. Appeals to the Cabinet Secretary went unanswered, and mediation attempts through the Inter-Governmental Technical Relations Committee yielded no concrete results.
The Sacco alleged that liquidators withheld key financial documents, preventing the County Government from assessing or offering financial support. MUSCCO further filed court applications to block the auction of MUSCO Towers, scheduled for January 31, 2020, though auctioneers issued another sale notice in March 2020.
Taskforce Paves Way for Revival
The breakthrough came when CS Oparanya appointed a 13-member taskforce in December 2023, chaired by Joshua Choge. The taskforce was mandated to conduct a comprehensive review of MUSCCO’s status, including membership, financial position, asset valuations, and the circumstances leading to liquidation.
The taskforce’s work included assessing the performance of the Society’s loan book, determining the status of MUSCO Towers, evaluating the impact of continued liquidation on members, and drawing up a revival plan aligned with the government’s Bottom Up Economic Transformation Agenda (BETA).
A New Beginning
The lifting of the liquidation order marks a turning point for MUSCCO members who have endured years of uncertainty about their savings and investments. However, the road ahead requires strict adherence to governance standards and regulatory compliance to prevent a recurrence of past problems.
The case highlights the delicate balance between regulatory oversight and the preservation of cooperative institutions that serve thousands of Kenyans, particularly in the education sector where MUSCCO has traditionally played a vital role in providing financial services to university staff.
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