High Court freezes KUSCCO assets amid legal battles

NAIROBI, Kenya, Mar 27 – The High Court has issued fresh conservatory orders barring any disposal or transfer of assets linked to Kenya Union of Savings and Credit Co-operatives in an ongoing legal battle with RUPSA Regulated NWDT SACCO Society Limited, deepening a dispute over Sh108.8 million in unpaid deposits.

In orders issued on March 25, 2026, the court directed that the application be heard on an urgent basis, while temporarily safeguarding the company’s assets and shareholding structure pending determination of the case.

“I allow prayer 2(a) restraining the disposing of, selling, transferring, encumbering, charging or otherwise dealing with any asset of the Company,” ruled Freda Mugambi.

“and 2(c) against transferring, disposing of or encumbering any shares held by the Company in any subsidiary or affiliated entity, pending the hearing and determination of this application.”

The matter will be mentioned on May 27, 2026 for further directions.

The latest orders stem from a long-running dispute between the two cooperative institutions, dating back to fixed deposit investments made by RUPSA SACCO with KUSCCO from 2018.

RUPSA is seeking to recover Sh108.8 million comprising principal, interest, and costs after KUSCCO allegedly failed to honour withdrawal requests and subsequent tribunal orders.

In January, the Co-operative Tribunal allowed RUPSA to auction KUSCCO’s movable assets, including vehicles and office equipment, following prolonged non-payment.

However, the High Court had earlier halted the auction, granting temporary relief to the apex cooperative body amid concerns over operational disruption.

The case adds to mounting pressure on KUSCCO, which has been grappling with liquidity constraints and governance challenges following a multi-billion-shilling financial scandal that has shaken confidence in Kenya’s SACCO sector.

Recent audits and regulatory reviews have pointed to losses exceeding Sh13 billion, largely attributed to governance failures, irregular lending, and weak oversight.

The latest court orders effectively preserve the status quo, preventing asset disposal or restructuring that could complicate recovery efforts as the case proceeds.