Manager Flees Safaricom-Linked Sacco As Fears Of Investors Losing Savings Becomes Imminent

A storm is brewing at SIC Investment Co-operative as its chief executive officer Churchill Winstones has abandoned ship, leaving behind thousands of anxious depositors struggling to recover their hard-earned savings from the troubled society.

Winstones’ dramatic exit late last week comes as the once-popular Sacco, which counts current and former Safaricom employees among its 5,300 members, battles a crippling cash crunch that has left investors who sunk millions into its Pepea Fixed Deposit product stranded.

The departure marks yet another shake-up at the beleaguered institution, which in June witnessed the entire board being shown the door and replaced with interim directors who were only confirmed three months later. Winstones becomes the second CEO to flee the cooperative in less than four years, following Sarah Wahogo who served from March 2022 until early last year.

Multiple investors who each deposited at least Sh4 million into the Pepea Fixed Deposit account have told this writer that SIC has been playing a dangerous game of delay tactics, repeatedly postponing payments and citing liquidity problems as their investments reach maturity.

The scale of the crisis is laid bare in the cooperative’s annual report for 2024, which reveals a shocking Sh380 million bank run on the Pepea product as panicked customers rushed to pull out their money earlier than expected. The unexpected mass withdrawal has created a domino effect, leaving those who dutifully held their investments to maturity unable to access their funds.

Acting CEO Jared Odhiambo, who previously served as head of finance, has admitted the society is drowning in liquidity challenges but insists they have a plan to settle all investors by March next year. He claims the cooperative is gradually paying off depositors and is now restructuring the product to tie it to specific projects.

However, such assurances ring hollow for investors who were promised their principal and accrued interest within 10 days of maturity. Some have already written to the Commissioner for Co-operatives Development David Obonyo, desperate letters seen by this publication that paint a picture of growing desperation.

The Pepea Fixed Deposit, which SIC marketed as an exclusive product offering lucrative returns of up to 12 percent annually, attracted depositors with promises of competitive rates second to none in the market. Investors who locked in amounts exceeding Sh3 million for 12 months were promised returns of 12 percent, significantly higher than what most banks offer.

The minimum investment of Sh50,000 could be locked in for six to 12 months, with returns ranging from 10 percent to 12 percent depending on the amount deposited and tenure selected. The product came with a harsh penalty clause, investors who withdrew before maturity forfeited all accrued interest, a trap that has now left many feeling cornered.

Adding to the mess, SIC was forced to restate its books for the year ended December 2023 to correct several misstatements, slashing retained earnings by Sh26.15 million. The accounting irregularities raise troubling questions about the financial management and oversight at the cooperative.

Interest payments on the Pepea product climbed to Sh48.95 million in 2024 from Sh40.35 million the previous year, indicating the product’s growing popularity just before the crisis hit. What triggered the sudden rush by many customers to withdraw their funds early remains unclear, but the consequences have been devastating for those who played by the rules.

The Commissioner for Co-operatives claims he was unaware of the liquidity crisis despite letters from distressed investors landing on his desk. Obonyo has now promised to intervene, but for many depositors watching their savings disappear into a black hole, such promises offer little comfort.

SIC Investment Co-operative, which started operations in 2009, built its reputation partly on its association with telecommunications giant Safaricom, attracting employees and former staff who trusted the society with their retirement savings and investment funds. The principal activities include real estate investment, marketable securities and private equity.

As March 2025 approaches, the critical question remains whether SIC can deliver on its promise to settle all investors or whether this will become another cautionary tale of Kenyans losing their life savings to a cooperative that promised the moon but delivered only heartache.

For now, investors can only watch and wait, hoping their money has not vanished into thin air while the man who was supposed to steer the ship to safety has quietly slipped away into the night.​​​​​​​​​​​​​​​​