The High Court has temporarily stopped the liquidation of the Kenya Union of Savings and Credit Co-operatives (KUSCCO). Lady Justice Rhoda Rutto suspended Gazette Notice No. 13997 issued by the Commissioner for Co-operative Development, which had appointed three state officials to dissolve the union and take custody of its assets.
The stay remains in force until 28 September 2026, when the court will decide whether it has jurisdiction to hear the dispute filed by RUPSA Regulated NWDT Sacco Society Limited. The liquidators cannot proceed while the notice is suspended.
Why RUPSA Went to Court
RUPSA, a Ruiru-based SACCO, holds an unpaid decree of approximately Sh108.85 million against KUSCCO. It argued that the sudden Gazette Notice interfered with earlier High Court preservation orders issued in March 2026 and later extended, which were meant to protect KUSCCO’s remaining estate under court supervision.
The SACCO also challenged the choice of liquidators. One of the three appointees, CPA Peter Wanjohi Kiama (Deputy Commissioner for Co-operative Development), had previously served as KUSCCO’s acting CEO. RUPSA wants an independent insolvency practitioner appointed under the Insolvency Act instead of state officers.
The three officials named in Gazette Notice No. 13997 of 31 August 2026 are Peter Wanjohi Kiama, Habil Olembo Jesse (Principal Co-operative Officer) and Mariam Adam Abubakar (Deputy Chief State Counsel). They had been authorised to take custody of all KUSCCO properties, books and records for up to one year.
The Financial Hole Behind the Crisis
KUSCCO is insolvent. Court and audit documents put its liabilities at about Sh17.7 billion against assets of roughly Sh5.2 billion to Sh5.4 billion, leaving a deficit of around Sh12.5 billion.
A PricewaterhouseCoopers (PwC) forensic audit earlier uncovered a shortfall of between Sh12 billion and Sh13.3 billion linked to ghost loans, falsified records, phantom profits, unauthorised commissions and executive mismanagement. Over Sh206 million was withdrawn in cash without proper documentation, according to audit findings that have been widely reported.
About 177 creditor SACCOs are owed roughly Sh6.17 billion. Individual losses already written off or disclosed by member SACCOs include Balozi (Sh437.5 million), Afya (Sh361.6 million) and Stima DT (Sh108 million), among others.
What Is KUSCCO?
The Kenya Union of Savings and Credit Co-operatives (KUSCCO) was established in 1973 as the national umbrella body for SACCOs. It provided advocacy, representation, a central finance fund and insurance products to more than a thousand member SACCOs across Kenya. For many years it functioned as a key financial and protective institution for the co-operative movement.
After years of liquidity problems, members voted on 28 August 2026 to dissolve the union. Three days later the Commissioner for Co-operative Development, David K. Obonyo, published the Gazette Notice cancelling KUSCCO’s registration and ordering liquidation under the Co-operative Societies Act.
What Happens Next
The temporary freeze stalls the government-led wind-up process while the High Court reviews the competing claims. RUPSA wants the Gazette Notice set aside and an independent liquidator appointed to protect remaining assets and investigate intercompany transactions involving KUSCCO subsidiaries (reported at about Sh6.27 billion).
Former executives remain under multi-agency investigation following the PwC findings, which were previously handed to the Inspector-General of Police.
Related:Top SACCOs in Kenya by Assets and Dividends (2026)
Bottom Line
Lady Justice Rhoda Rutto has suspended Gazette Notice No. 13997, temporarily halting the liquidation of KUSCCO by three state-appointed officials. The order protects existing court preservation measures while the court determines jurisdiction on 28 September. RUPSA Sacco, owed Sh108.85 million, is leading the challenge and demanding an independent insolvency practitioner.
KUSCCO remains deeply insolvent, with liabilities of about Sh17.7 billion against assets of Sh5.2–5.4 billion and a PwC-documented shortfall of Sh12–13.3 billion. Hundreds of member SACCOs face significant losses as the court process continues.
Sources:
Business Daily – Judge suspends liquidation of troubled Kuscco (9 September 2026);
Business Daily – Twist as sacco moves to block State-picked Kuscco liquidators;
The Eastleigh Voice – High Court halts KUSCCO liquidation;
Business Today;
PwC forensic audit findings as reported in earlier Business Daily and official statements. This article is for information only and is not legal advice.