The High Court has blocked officers from the Directorate of Criminal Investigations (DCI) from probing allegations of embezzlement at the Kenya National Police DT Sacco.
Justice Alexander Muteti halted the probe after Sacco officials challenged court orders obtained by the DCI in December to investigate the claims.
The Sacco submitted that the probe by the DCI would affect the operations and credibility of the deposit-taking (DT) Sacco.
Justice Muteti directed the case to be heard on April 24.
The court heard that investigating officer Duncan Maina obtained warrants from a Milimani court in December 2024 to inspect and verify copies of several documents deemed critical to the probe.
The documents include the list of names, particulars and personal accounts of current board members, tender records, community service responsibility project details, procurement documents and financial statements.
The investigating officer also sought audit reports and wealth declaration forms of board members, as well as minutes, resolutions and approved documents relating to the M-Tawi system.
“That the orders have far-reaching implications that will expose the Sacco to potential operational disruption, financial instability and erosion of public confidence,” the Sacco said through lawyer Cecil Miller.
He further submitted that the inspection of the documents falls within the mandate of the Sacco Societies Regulatory Authority (Sasra) under Sections 48(2) and 49(1) of the Sacco Societies Act, which gives the regulator the power to inspect Sacco records.
Mr Miller also said the Sacco Societies Fraud Investigations Unit (SSFIU), established by the Sasra Act in 2020, is mandated to detect, prevent and address fraudulent activities within Saccos.
“Due to the sensitive nature of the Sacco being a deposit-taking institution, the power granted to Sasra is ideal to protect depositors,” he said.
Justice Muteti allowed SSFIU to conduct th probe pending determination of the case.
He revealed that Kenya National Police DT Sacco has Sh34 billion in deposits and Sh58 billion in assets as well as 75,000 members.
Solomon Atsiaya, the chief executive officer of the Sacco said the right to confidentiality and protection of its members’ personal and financial data under the Data Protection Act was at risk of being breached as the orders would lead to unauthorised dissemination of sensitive information.
He said eight members of the Sacco lodged a complaint with the DCI alleging embezzlement of funds by officials.
Mr Atsiaya said Sasra’s oversight is critical in ensuring compliance with prudential standards prescribed under Section 48(2) of the Act and any deviation from the process undermines the statutory framework established to regulate Saccos.
“The purpose of Sasra is to safeguard depositors’ interests and investigating by the DCI will create a frenzy among the depositors causing a bank run,” he said.
He said the Sacco has always complied with the requirements of Sasra by submitting monthly reports and the same was done recently where records were inspected and reports issued by the regulator.
Mr Atsiaya said Mr Maina was issued with warrants to investigate the affairs of the Sacco, which creates a conflict of interest as the process of implementing the order would not be impartial.
He said one of the investigators had applied to become a director but could not make it.
