This archive report was first published on 31 October 2019.
On October 31, 2019, thousands of members of the troubled Moi University Cooperative lost their entire life savings to mismanagement. The Cooperative Bank has instructed liquidators to sell the Musco Towers in Eldoret town to recover some Sh500 million that was borrowed to put up the towers.
According to an official, there is no money in the sacco accounts, but Sh44 million that had been deducted from staff but not remitted has been recovered. Another Sh26.8 million, which the University of Nairobi owed the sacco, has been recovered, but swallowed by debts.
As a result of the mismanagement, an inquiry ordered by the Commissioner of Cooperatives found a Sh4 billion hole in Musco's books, being the difference between the value of all assets and liabilities. Past directors and managers were found to have siphoned billions of shillings from the workers' savings kitty, but might go unpunished.
Member savings are booked as liabilities, and they can only be recovered after ordinary creditors, in this case Cooperative Bank and the contractor, have been paid. Being that the assets are insufficient to settle the liabilities, the sacco was declared insolvent last year and subsequently de-registered.
