High Court Blocks Sale of David Gakuyo Assets to Repay Ekeza Sacco Members’ Savings

The High Court has issued orders blocking Ekeza Sacco founder and chairman David Kariuki Ngare alias Gakuyo from selling his assets to refund members' savings.

This comes after the Commissioner of Cooperatives Mary Mungai filed an application seeking to block the sale of the property.

In her application, Ms. Mungai says the restraining orders would allow the government to complete investigation into the Sacco's illegal operations.

She argued that the sale of the assets would jeopardize an ongoing inquiry into the society's operations.

Some of the property Gakuyo was targeting to auction includes the Lillies Hotel in Juja, Salama House and Swift Breeze Hardware on Garissa Road.

Others are a quarry in Murang’a and 250 acres of land in Machakos and Murang’a Counties.

“An order of injunction is hereby issued restraining David Kariuki, Gakuyo Real Estate Ltd and Leaky Auctioneers Ltd from proceeding with the intended auction in respect of property owned by Gakuyo Real Estate Ltd,” the order by High Court reads.

The auction was scheduled to be carried out by Leaky Auctioneers and was meant to raise funds to refund Ekeza Sacco members' deposits.

The matter will be heard on March 7th, 2019.

Initial investigations by the Co-operatives ministry found out that Gakuyo and his wife irregularly withdrew Sh1.5 billion from Ekeza Sacco and wired the money to their personal account.

A team appointed by Commissioner for Cooperatives to audit the Sacco says that the transactions were made between 2015 and 2017.

They established that Gakuyo and his wife withdrew Sh88 million in 2015, Sh850 million in 2016 and Sh625 million in 2017.

Sh500 million out of the Sh1.5 billion was loaned to members who were seeking to buy homes.

“So we can say the money Gakuyo owes members is about Sh1 billion. This is the money he took illegally and without any approval of the members, and it is the money we want him to pay,” the report by Stephen Njoroge and Philip Ulluma reads.

The society had 26 branches across the country, a membership of more than 50,000 and Sh2.6 billion in deposits. About 5,000 members are Kenyans in the diaspora.