How 16,000 officers lost their Police Sacco savings

Police Recruits

New recruits during the passing out parade. In the 80s, it was mandatory for police recruits to join the Police Sacco and live at Ruaraka Housing Estate.

Photo credit: File | Nation Media Group

What you need to know:

  • Recruits were forced to pay through a check-off system but have not received benefits as the project now lies in the hands of nine individuals.
  • In 1990, the Sacco acquired Matungulu House using a Sh120 million loan from the Kenya Union of Savings and Credit Co-operatives that was offset by the members.

Senior police officers, both serving and retired, are among 16,000 people who lost millions of shillings in two projects initiated by the Police Sacco which is now in the hands of nine individuals.

Officers from the National Intelligence Service (NIS), Directorate of Criminal Investigations (DCI), serving regional commanders, district commanders, sub-district commanders and officers commanding stations are affected.

They allege that they were forced to pay for the projects through the Sacco but are yet to see the benefits.

Some of the architects of the projects served in the Kenya Police Service in the 1980s and were based at Vigilance House.

In the 80s, it was mandatory for all police recruits to join the Sacco. Then, recruits were forced to live at Ruaraka Housing Estate in Kasarani, Nairobi County.

Documents in our possession show that the Ruaraka housing project started in 1981 and was an investment of members of the Police Sacco.

“It comprised a 20.4-acre piece of land LR8393 lower Kiambu adjacent to Safari Park Hotel in Kasarani area along Thika Road,” the documents show.

The Police Sacco owns the land title, according to the documents, and 8,003 recruits paid for the purchase of the land and construction of houses.

The land was then divided into 32 plots of about half an acre each; 31 bungalows were built on each one of the plots and a service centre was built on the remaining one.

“The project was completed in October 1989. It was funded by members of the Kenya Police Sacco Society and the Kenya Police Sacco, as a body corporate," the documents state.

By the time the project was completed, each member of the Kenya Police Sacco had contributed in the ratio of 1:2.35 held in the Sacco. It cost the 8003 officers Sh61.8 million to buy the land and construct the 31 bungalows.

When the Nation team visited the area yesterday, a plaque at the entrance revealed that it was officially opened by former Police Commissioner Philip Kilonzo. He died in 1997.

“This Kenya Police Sacco Society Housing Estate was officially opened by Mr PM Kilonzo Commissioner of Police on December 28, 1989,” the plaque reads.

Other buildings have been constructed on the land, which the officers claim as their own.

In 2000, the investment was transferred from Ruaraka Housing Estate to Ruaraka Housing Estate Limited, and the ownership of the new company at the time had nine interim directors.

The Nation cannot reveal their names for legal reasons.

At the time the interim team was elected, the company had a membership of 8,003 shareholders and the Nation understands that some are now retired and a few are still in service but close to retirement.

The Kenya Police Sacco Society Limited was also a shareholder when the assets and liabilities were transferred to Ruaraka Housing Estate Limited after its incorporation.

"The ownership of Ruaraka Housing Estate is 75 per cent member shares and 25 per cent Kenya Police Sacco shares," the documents state.

Upon completion of the houses in Kasarani, Safari Park Hotel management leased them from October 1989 to July 31, 2004. They could later vacate after giving one month's notice.

A hotel official told the Nation they left after directors of Ruaraka Housing Estate Ltd refused to reduce the rent from Sh30,000 to Sh26,000 per unit.

However, the board of the investment firm reached an agreement with the hotel’s management to buy the furniture, cutlery and electrical appliances that were in the 31 units.

“A purchase price of Sh13.7 million was agreed on. The investment firm had no money and agreed to pay the amount in 12 installments, with the last being in August 2005,” the documents further reveal.

A caretaker was hired and a year later was joined by three permanent employees and three casuals.

Lee Security Services provided security services, Nairobi Botanica Ltd did the cleaning and gardening services as well as Windsor Dry Cleaners Ltd.

Victims of the Ruaraka Housing project said they used to contribute Sh200 monthly, but have never benefited for the past 36 years.

Investigations by the Nation now show that the directorship of Ruaraka Housing Estate Ltd has changed.

A search of the company's ownership shows that it currently has nine directors and one secretary. The nine include those who were elected as interim directors. Interestingly, they were police chiefs at the time, and were expected to ensure the well being of juniors’ investments.

Another project the officers now say they were forced to invest in is the ownership of the Utumishi Cooperative House.

In the 1980s, the Kenya Police Sacco showed interest in buying Matungulu House, which was located on Mamlaka Road.

In 1990, through money paid by 16,000 members, including 8,003 who also purchased the Ruaraka Housing Project, the project was purchased. According to members, a Sh120 million loan from the Kenya Union of Savings and Credit Co-operatives was used to purchase the building.

Members repaid the KUSCCO loan through a check-off system.

Those who spoke to the Nation said they paid Sh600 monthly from 1991 to 1998.

The recruits of Detail Training 62 were the last to pay their contribution towards the purchase of the building.

It is located on plot L/R209/85/92/4. The Nation has established that the title deed of the land shows the Police Sacco as the owner.

The building was renamed Utumishi Co-op House and was managed by the Police Sacco until 1995 when the ownership was transferred to Utumishi Limited.

The shareholders who were in the police service say they did not agree to such a transfer and they never received the fruits of their investment.

Currently, the owners of Utumishi Investment Limited are not known and efforts by the Nation to verify who the directors of the company are have not borne fruit.

These two projects are now in court as some of the officers who contributed to them are planning to go to court today to demand their salaries.

The officers have formed a group chaired by Mr Moses Epoloto who now say they were never informed in the changes that took place and disassociated themselves from the projects.

The secretary of the group is Mr. George Musamali. The members are Mr David Ndiema, Mr Robert Karani, Mr Joseph Muchiri and Mr Kennedy Omwamba.

"All we want is justice because as we speak, the only fruits the officers have gotten from their investments are bitter fruits. Some of these officers are even mentally affected and others do not even remember the investments," said Mr Musamali.

He said the people who are frustrating them have taken advantage of the discipline and that the members who bought the projects are in different places of work.

Mr Musamali also said that they had started receiving some dividends from the Sacco after the group started raising serious issues related to the two projects.

"Some members of Utumishi Investment received some cash last week in the form of dividends. The highest was paid Sh1,800 but those in Ruaraka Housing are yet to receive any money," he said.

The Nation also spoke to a retired police officer who wanted his shares to be inherited by his daughter who is also a police officer but to no avail.

The officer said the Police Sacco did not allow him to transfer the shares to his daughter, which raises a lot of questions about whether he invested anything during his days as a junior officer.

"I have yet to understand what is really happening because I know I have shares and I have the right to transfer them. Why am I being denied this right?" he asked.

Sacco Societies Regulatory Authority (SASRA) CEO Peter Njuguna told the Nation on phone that when it comes to the percentage of assets members of Sacco can own its limited to 10 percent of the total shares.

He said in the case of what happened in the two projects linked to the police Sacco he would not comment as he had no idea what transpired.

"If you check what is being raised, it is currently owned by a limited company that does not fall under our mandate. If it has anything to do with the Sacco we have the records, but that specific issue I have no idea," he said.