Government halts Mwalimu Sacco deal to buy Equatorial
What you need to know:
The move comes after the Sacco announced it had paid Sh1.6 billion for a 51 per cent stake of Equatorial Commercial Bank.
The giant teachers' sacco plans to raise money from members to buy a further 24 per cent from billionaire Naushad Merali.
Mwalimu will do this by selling 40 per cent of Mwalimu National Holdings, the vehicle used to invest in ECB, to members.
The Government has suspended Mwalimu Sacco’s bid to acquire Mr Naushad Merali’s Equatorial Commercial Bank and ordered an inquiry into the transaction.
The move comes after the Sacco announced it had paid Sh1.6 billion for a 51 per cent stake and would raise money from members to buy a further 24 per cent. This has elicited protests from the Co-operative Alliance of Kenya (CAK) movement.
The Commissioner of Co-operatives has appointed an inquiry team to probe the matter and report to him. Making the announcement, Mr Patrick Musyimi said the team needs sufficient time to study the transaction.
“This move subjects the matter to a rigorous process that will ensure any pertinent issues are addressed before the deal can proceed,” he said.
Mwalimu Sacco's membership is drawn from the Teachers Service Commission (TSC) Secretariat and TSC teachers in secondary schools and tertiary institutions.
The sacco also has primary school teachers, the Mwalimu National Sacco Society staff and members’ spouses in formal employment.
The savings society was formed and registered as a sacco in 1974 with 145 members, who have increased to 57,521 as of March 2014.
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