Man sues sacco officials over mismanagement 

Bandari Sacco

In this photo taken on 9th January 2018, members of the Bandari Sacco Limited stage demos on the controversial piece of land at Nguu Tatu area in Kisauni, Mombasa.

What you need to know:

  • The petitioner has named Sacco Society Regulatory Authority (Sasra) as an interested party in the case.
  • Construction of the wall commenced in 2016 and has not been completed to date with funds being used for over five years.

A member of Bandari Sacco has sued the institution’s management committee and directors, accusing them of deliberately running down the cooperative.

This is in relation to a Sh207 million perimeter wall project.

Mr John Oucho, who has sued the sacco’s chief executive officer, Mr Joseph Otieno, and other members of the management committee, said the construction of the wall around a land owned by the sacco ought to have cost Sh25 million.

The petitioner has named Sacco Society Regulatory Authority (Sasra) as an interested party in the case.

Construction of the wall commenced in 2016 and has not been completed to date with funds being used for over five years.

“There is no value for the shareholders’ money in the acquisition of the parcel of land owing to the fact that the Sacco has not been able to get vacant possession other than using shareholders’ money,” says Mr Oucho in his petition filed at the High Court in Mombasa.

Abdicated its duties

Mr Oucho wants an order issued requiring the management committee to be surcharged and refund Sh180 million shareholders’ money.

He says that owing to mismanagement of the Sacco, there has been deterioration of service and depletion of its finances.

He also claims that due to bad governance and absence of basic structure, controls and regulations, Sasra has abdicated its duties making the Sacco suffer losses.

“The petitioner contends that the interested party (Sasra) has failed to offer governance, oversight authority and regulation to ensure the Sacco protects and upholds the rights and fundamental freedoms of the shareholders,” said Mr Oucho.

He further argues that the management committee’s action has affected the Sacco’s operations.

Mr Oucho is also seeking for a declaration that his rights and fundamental freedoms under the constitution have been violated by the respondents.

Contempt of court

The petitioner also wants a declaration that his rights and privileges under the Companies Act and the Cooperative Society Act have been violated, infringed and denied.

The respondents (sacco’s management committee and directors) have filed a notice of preliminary objection to the petition, which they term as fatally defective, lacking merit, frivolous and an abuse of the due process of the court.

The management committee further argue that the petition discloses no public interest but ordinary private interest disguised as constitutional issues.

They note that the court lacks the jurisdiction to resolve the dispute.

The respondents further claim that since the petitioner is aware of various suits and proceedings in court which touch on the same issue he has raised, his petition is brought in bad faith and amounts to contempt of court.

The case will be heard on October 27.

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