Ruaraka Housing responds to jittery shareholders over houses

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

Ruaraka Housing Estate Limited has dismissed claims that the operations of the company are shrouded in secrecy.

The company's chairman Albert Waweru Miare said the investment is financially stable despite economic hardships resulting from inflation and the effects of Covid-19 pandemic.

The response comes after an expose by The Standard on claims that members' savings had been misappropriated.

Speaking to The Standard, Waweru allayed fears by some shareholders that their savings might have gone down the drain.

There has been growing jittery among some shareholders who accuse management of various malpractices like disposing of the company's prime property without their knowledge, failing to pay them dividends and lack of transparency.

At the center of the fight between the company's board of directors and shareholders is a developed piece of land behind Safari Park Hotel, off Thika Superhighway.

Shareholders feel they are in darkness regarding the 31 bungalows and a business complex sitting on a 20.4-acre piece of land.

The uneasiness among shareholders is fueled by the fact that most of the bungalows have been sold.

According to Waweru, the sale was necessary to allow for the construction of the Safari Business Arcade.

"It is the proceeds from the sale of the houses that we used to build the business complex and projections are that by June this year; we shall start reaping big," said Waweru.

But shareholders mainly retired and serving police officers who invested their savings in the company through the Kenya Police Sacco claim they were never informed about the decision to sell some of the bungalows - a position dismissed by Waweru.

"Every year we issue AGM (Annual General Meeting) through a national newspaper, and go a step further by sharing the notices in forums of retired and serving officers. So it is a lie that they have been kept in darkness regarding the affairs of the company," said Waweru.

According to the official, some of the shareholders are not sincere having failed to acquaint themselves with what has been happening at the company.

Waweru told those complaining to stop dragging Kenya Police Sacco into the affairs of the company. He advised them to revisit the Articles of Association to have a better understanding of how the Ruraka Housing Estate Limited came into being.

More than 2,000 shareholders led by Moses Epoloto and George Musamali accused the Sacco of transferring their savings to the investments entity, which was initially known as Ruaraka Housing Estate without their knowledge.

Waweru defended Sacco against any wrongdoing, insisting the Sacco adhered to laid down regulations that require investments to be managed by a separate body that must be incorporated as a company.

Ruaraka Housing Estate was transferred to Ruaraka Housing Estate Limited on November 27, 2001, effectively leaving Sacco to focus on the core business of managing savings and loans.

Before the transfer, the then Kenya Police Sacco chairman, John Mwakazi, had on May 11, 1990 wrote a letter to the Commissioner of Co-operatives proposing to be enjoined in the investment at a ratio of 25:75 per cent.

Mwakazi requested due to arising ambiguity after the Sacco had completed in October 1989, constructing 31 bungalows on a piece of land that was acquired in 1981. Membership of the Sacco stood at 8,003 upon completion of housing units.

Meanwhile, Sacco as a body corporate was supposed to contribute its funds of 25 per cent while the remaining 75 per cent was contributions from members' funds.

The allotment of shares was Pro-rata with Kenya Police Sacco required to release its funds amounting to Sh15,468,296 while the member's contribution was Sh46,404,889, which were converted into individual member shares.

According to Waweru, the Sacco never, and has not up to date contributed. This would perhaps help explain why Sacco has no stake in the company.

"The Police Sacco failed to contribute 25 per cent of the cost of the property, and therefore the Sacco remains a stranger to the company," stated Waweru.

Nevertheless, Mwakazi's request was approved. In letter by then Commissioner of Co-operatives, S. Kirugi, the Sacco was advised to go ahead and issue share certificates to members who were registered as at December 28, 1989.

"Such share certificates should be proportional to each member's savings in the society on 28/12/1990. The society will retain shares worth 25 per cent of the cost of the project including the cost of land," directed Kirugi.

He further advised the Sacco to maintain a register of all members issued with share certificates adding that the project should be managed as a separate activity from the society.

In what is shaping up to be a protracted legal battle, founder Sacco members have gone to court to seek among other demands; have directors of Ruaraka Housing Estate Limited be stopped from transacting any business besides being compelled to provide membership register.

They have filed a notice of motion before Lady Justice J.W.W. Mongare who will provide direction on March 11, 2024.