We are in the dark, Police Sacco founders question sale of prime properties

When the Chairman of Ruaraka Housing Estate Albert Waweru spoke to Standard at his Offices in Nairobi. [Samson Wire, Standard]

There is a tough and risky job. As a result, the wish of every serving police officer is to enjoy a peaceful retirement life.

No wonder, when the idea of forming a Savings and Credit Cooperative Society (Sacco) was mooted in 1972, most of them readily embraced it.

And for the next nine years, committed members of National Police Sacco contributed their savings enabling the entity to become financially stable and acquire 20.4 acres of land behind Safari Park Hotel in Nairobi for Sh4.1 million.

This project was registered under Ruaraka Housing Estate. Soon after, the land was subdivided into 32 plots of approximately half an acre each before 31 bungalows were constructed on it. One of the plots was reserved for a service centre.

The construction was completed in October 1989. But then came new regulations that barred Saccos from investing members' savings in assets. By then, the National Police Sacco had grown to 8,003.

Following the change of law, Ruaraka Housing Estate was transferred to Ruaraka Housing Estate Limited, a company that was formed and incorporated on November 26, 2001.

This effectively delinked the Sacco from the new investment entity.

As this was happening, the Sacco had set its eyes on Matungulu House along Mamlaka Road which was bought in 1990 from Matungulu Farmers Sacco. According to members, a loan facility of Sh120 million from the Kenya Union of Savings and Credit Co-operatives (KUSCCO).

Members repaid the KUSCCO loan through the check-off system. The building was renamed Utumishi Co-op House then rented to the Police Sacco, which managed the property on behalf of its members before allegedly transferring it to Utumishi Investment Limited in 1995 without the knowledge of shareholders.

Fast forward to this year, the original shareholders who invested in Ruaraka Housing Estate Limited and Utumishi Investment Limited accuse the officials of the Sacco of failing to set the record straight regarding ownership of the two properties, which they claim were mismanaged before being sold to third parties, effectively shattering their dreams of reaping fruits in retirement.

However, David Kangogo, national vice chairman of the National Police Sacco, shifted the blame to previous office holders and shareholders for aiding in the transfer of the properties.

"As it stands now, those are independent entities, and our hands are tied. It is the shareholders and previous directors of the Sacco who resolved to invest in real estate," explained Kangogo.

But shareholders disagree, accusing the Sacco of keeping them in the dark and failing to properly safeguard their savings.

Nevertheless, they have vowed to reclaim the two properties even if the Sacco is no longer interested.

Some of the members are preparing a court petition against the directors of Ruaraka Housing Estate Limited and Utumishi Investment Limited.

"We were convinced to invest our money in the projects with the expectations of earning good dividends, but that was just a dream. I don't remember the last time I received dividends exceeding Sh200 and that's why I am part of those seeking transparency," said a police officer.

The concerned original shareholders numbering 2,300 have formed a steering committee to pursue the matter in court on their behalf.

Moses Epoloto is the committee's chairman while George Musamali serves as the secretary. Members are David Ndiema, Robert Karani, Joseph Muchiri and Kennedy Omwamba.

In the petition drafted by lawyer Gideon Ogude, the unhappy members want the court to compel the management to lay bare the current position of LR No. 8393, produce title deed for the piece of land where Utumishi Co-op House stands, disclose, and free both bank accounts of Ruaraka Housing Estate Limited and Utumishi Investment Limited.

"As we head to court, we shall also report to Ethics and anti-Corruption Commission to investigate board members and demand for a forensic audit of all properties owned by Utumishi Investment Limited and Ruaraka Housing Estate Limited," added Musamali.

The shareholders, some of whom have already retired, claim they were neither informed nor involved when the Sacco transferred the properties alleging they have information the Ruaraka property has since been sold.

"At what point were resolutions passed to incorporate the Ruaraka Housing and Utumishi Investment as separate companies and when did the Sacco delink itself from the running of the two entities?" posed a shareholder who is still serving in the Service.

The shareholders are also demanding to be told who authorised the sale of the Ruaraka houses even as it emerged that when most of the decisions and resolutions were made during Annual General Meetings (AGM), there was no room for asking questions or raising contrary opinions since directors sitting on the Boards are their superiors.

According to Ndiema, members have been kept in the dark regarding the sale offer for the Ruaraka houses, the purchaser and amount that was raised. "We also want to be told the last time dividends were declared and how much has been raised so far," he said.

Albert Waweru Miare, chairman, of the Board of Directors Ruaraka Housing Estate Limited, maintains the decision to sell some of the bungalows was made during a fully constituted AGM and that the disgruntled shareholders are not being truthful, coming at a time when the company is wooing potential tenants to occupy Safari Business Arcade along USIU Road.

"We are aware that non-members are trying to destabilise the company, and some of them had left Police Sacco to join other Saccos. They are now trying to come back having realised we have invested prudently and bought land in Lamu," he said.

During an interview with The Standard, Waweru produced the register capturing details of 9,000 members he assured are the rightful owners of Safari Business Arcade and the 60 acres in Lamu.

On his part, Utumishi Investment Limited chairman Aloise Mbijiwe refuted the misappropriation accusations and challenged aggrieved members to produce evidence.