The Cooperatives Tribunal has ordered struggling Metropolitan SACCO to refund a member’s Ksh 351,258.71 deposit plus costs and interest after failing to prove why it had not done it despite her withdrawal notice.
- •The dispute dates back to August 2022 when the claimant, Teresia Atieno, gave the SACCO a 60-day notice to refund her deposits after instructing the Teachers Service Commission to stop her remittances to the Sacco.
- •Metropolitan failed to honour the refund citing liquidity challenges that prompted it to defer payments on refunds for two years, from several Annual General Meeting (AGM) resolutions.
- •Data from the SACCO Societies Regulatory Authority (SASRA) shows that the society’s total assets decreased from KSh 10.02 billion in 2022 to KSh 1.07 billion in 2023, as the cooperative lost members.
“The Claimant did properly withdraw from Metropolitan by issuing a handwritten letter dated 1st August, 2022 for a refund of her savings formally, and the SACCO has not produced anything to show that there is a standard format for notice of withdrawal from the SACCO, and as such, the said letter by Atieno constitutes a proper Notice of Withdrawal and request for refund,” Tribunal ruled.
Metropolitan Sacco had argued that members had resolved in 2019 to issue refunds on a first come first serve basis, and then in 2022 to halt all further refunds as it navigated a bank run. The 2022 AGM resolution was triggered by “the large number of former members exiting the Sacco”, Metropolitan argued in its filings.
“Metropolitan has not pleaded any liability on the part of Atieno in terms of loans and guarantees to other members, and in as much as we sympathize with the Respondent’s financial situation, we are also alive to the fact that a member has a right to her deposits,” the Tribunal ruled.
A 2022 audit showed the institution had lost KSh 12 billion in a wide ranging fraud. It included KSh 7 billion loaned to fake members, an unexplained Ksh 176.9 million in cash disappearances, and KSh 490 million in fraudulent employee loans. The Society’s balance sheet size was also overblown by a massive KSh 14 billion to KSh 28 billion.