Ministry on the spot over Sacco liquidation

Cooperatives PS Patrick Kilemi (2nd right) with Drumvale Farmers' Cooperative Society Chairman Felix Maingi Nguo (2nd left) Liquidator Peter Wanjohi when they appeared before the Senate Committee on Trade on April 6, 2023. [Elvis Ogina, Standard]

The Ministry of Cooperative Societies was today put to task to explain the circumstances under which it had liquidated and sold assets belonging to Drumvale Cooperative Society Limited that owns 12,000 acres of land in Nairobi and Machakos counties.

Machakos Senator Kavindu Muthama had asked the ministry to explain why the liquidation process had taken so long, which resulted in Sacco members suffering.

Ms Muthama said that a report presented by Ministry of Cooperatives, Micro Small and Medium Enterprises Development Principal Secretary Patrick Kilemi was not satisfactory.

The senator told the Senate Committee on Trade, Indusatrialisation and Tourism that the cooperative society was established in 1960 and registered in 1963. Its members from Kangundo, Matungulu and Mwala had bought ownership shares at Sh200.

She claimed that huge parcels of land had been sold by the liquidator.

"Peter Wanjohi, who was appointed as the liquidator by the Ministry of Cooperatives, should come out clear with a comprehensive report presented to this committee since it is sad that the members have failed to enjoy the fruits of their labour for many years," said Muthama.

But Mr Wanjohi defended himself against any wrongdoing, saying that he had not sold any property for the last 10 years and that most transactions took place between 2010 and 2012.

The Senate was told that the cooperative society was put under liquidation in 2009 after it failed to file annual returns for more than three consecutive years.

Mr Kilemi told the Senate that the liquidation was due to financial constraints faced by the society.

The principal secretary informed the committee that a case had been lodged at the Cooperatives Tribunal in 2016, with the next hearing on May 15, 2023 with the liquidation order having been lifted and the society's registration reinstated.

Kilemi said that the liquidator disposed of the unallocated parcels of land in line with Section 66 of the Cooperatives Societies Act, and the proceeds were used for survey, repair beacons, legal expenses, facilitation of title deeds, and refund of members shares.

The principal secretary said that the Commissioner of Cooperatives had submitted a detailed report on the status of liquidation of the society from 2009 to 2023, with several achievements.

"The liquidator appointed by the government has assisted 195 members to process their title deeds in Athi River Block 5, assisted over 460 members to process their lease titles in Nairobi Block 118, and assisted over 90 members acquire title deeds in Mavoko Town Block 12," said Kilemi.

The principal secretary further told the committee that the liquidator has successfully refunded shares and deposits to over 1,000 members, successfully mediated over 150 members disputes, and provided security for members' land at Mavoko for seven years.

Kilemi told the committee led by Kajiado Senator Seki Lenku that they have managed to re-establish boundaries, placed beacons for most members plots, and processed allotments between 2010 and 2015 besides surveying and registering subdivisions that were pending before liquidation.

He also informed the committee that the Cooperatives Tribunal issued ex-parte orders that directed that the liquidator temporarily cease from subdividing and selling off the society land, and to provide the complainants with a report on the liquidation process.

"The order on the land was fully complied with since the society at the time had no land to subdivide and sell. A second order was also complied with by the liquidator filing the report through the tribunal with the case still pending for determination at the Cooperative Tribunal," said Kilemi.