Troubled Ekeza Sacco Refunds Sh750 Million in Cash and Land to Members

Ekeza Sacco has refunded a total of Sh750 million to its members in form of cash and land.

The refunds were made following an out-of-court settlement that saw the government appoint investment banker Jimmy Kagoni as acting CEO of the troubled Sacco.

A 2018 audit by the Commissioner of Cooperatives showed that over Sh1 billion in members’ deposits had been transferred illegally to the accounts of Gakuyo Real Estate, owned by former Ekeza Sacco chairman and founder David Kariuki Ngari, alias Gakuyo. This triggered panic, with many Ekeza Sacco members seeking to withdraw their savings immediately.

The Directorate of Criminal Investigations (DCI) Economic Crimes Unit took up the matter and forwarded its findings to the Director of Public Prosecution (DPP).

Ekeza Sacco members and the management struck an out-of-court deal and the case was withdrawn in October 2019. The Ministry of Cooperatives then seconded Kagoni and a caretaker committee to the Sacco to oversee refunds to members within a strict budget.

The Commissioner of Cooperatives directed that Gakuyo Real Estate’s operations be separated from Ekeza Sacco, with Gakuyo agreeing to forfeit some of Gakuyo Real Estate properties as a refund to what he owed Ekeza Sacco.

“What was supposed to be refunded back was Sh1 billion and it was agreed that properties worth Sh881 million would be handed over to the Sacco to compensate grieving members and that is what we have been using to pay back our members,” Kagoni said.

The properties are located in Subukia, Joska, Gwa Kungú, Kilimambogo, Mariakani, Konza Goshen, Konza Phase 6, and Nanyuki kwa Daiga.

“80 percent of the members had requested their refunds but there are 20 percent who are okay and would want to continue,” Kagoni noted.

“We are having a very serious challenge in getting people who owe us money to pay us back. Some of them have vandalized the vehicles that were financed by the Sacco's money, others have removed the tracking devices, making it difficult for us to track them, but we have engaged the authorities in having this solved.”

Kagoni said Sh250 million remains to be refunded to Sacco members.