A police probe is underway into a suspected extortion ring linked to attempts to interfere with a Ksh 14 billion payout by Co-operative Bank to shareholders, many of them farmers drawn from savings and credit cooperative societies.
Investigators are examining a trail of court filings submitted in the names of Sacco officials and shareholders, with bank sources saying the documents are being used to stall the planned restructuring of the lender into a holding company structure.
Co-operative Bank Group Managing Director and CEO Dr Gideon Muriuki announced on April 21 that the institution will transition into a non-operating holding company model, a move set to see it rebranded as Co-opbank Group PLC.
Under the new structure, pending approval from the Central Bank of Kenya, the Capital Markets Authority and other regulators, the holding company will sit above all group businesses while maintaining a listing on the Nairobi Securities Exchange. A new banking subsidiary, Co-Op Bank Kenya Ltd, will take over local banking operations.
After the restructuring plan was made public, a politician is said to have approached the bank presenting himself as acting on behalf of cooperative interests, later introducing legal documents tied to efforts aimed at delaying the process.
Bank insiders say the process began with demand letters and draft court cases delivered to Co-op Bank, followed by messages inviting bank representatives to talks outside formal shareholder and legal channels.
As the communications continued, cooperative leaders from certain counties later said their names and institutions had been attached to filings without authorisation. Police are now examining claims that signatures belonging to Sacco officials were forged or used without consent.
Those familiar with the matter say the group behind the filings is also linked to demands for payment from the bank in exchange for withdrawal of the court cases, a development that has drawn investigators into reviewing both legal documents and communication trails connected to the dispute.
Co-operative House along Haile Selassie Avenue in Nairobi remains central to the group’s operations as the restructuring process moves through regulatory review and the bank prepares for the planned corporate transition.
