Authorities are moving to suspend and wind up a newly registered coffee cooperative in Murang’a County after investigations linked its leadership to the suspected loss of more than KSh117 million from another farmers’ society. The probe also found serious irregularities in how the new cooperative was registered.
An inspection by the State Department for Cooperatives has called for the immediate suspension of Marga Farmers’ Cooperative Society’s registration certificate, paving the way for its cancellation and liquidation. Marga, based in Mathioya, was formed in 2024.
Investigators found that the society’s interim officials previously held senior positions at Kangunu Farmers’ Cooperative Society and were forced out last year after allegations of financial misconduct. The inquiry into Kangunu claims that KSh117,048,669 was misappropriated between 2018 and October 2024.
According to the inspection report, Marga’s financial position is shaky. Regulators noted that the cooperative rushed to take bank loans within its first year of operation, despite limited trading activity. The report concluded that this borrowing spree pointed to weak economic viability and an inability to meet obligations through normal cooperative business.
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Despite their removal from Kangunu, the same individuals later resurfaced as interim leaders at Marga. The report names interim chairman Geoffrey Maina Macharia, who was surcharged KSh7.1 million; interim vice chairperson Stephen Marioko, surcharged KSh108.6 million; and interim secretary Margaret Wairimu Macharia, surcharged KSh989,540. Investigators said these adverse findings should have disqualified Marga’s application and bylaws under cooperative law.
The inquiry further established that Marga was registered using documents later disputed by people whose names appeared in its formation records. Several individuals listed as attendees at the inaugural meeting denied ever being present, while a former cooperative official cited in the paperwork disowned the meeting minutes. Investigators concluded that the society’s formation lacked legal validity.
Operational concerns also emerged. Marga was found to be purchasing coffee cherries in cash through agents across Mathioya and Kangema sub-counties, a practice regulators associate with coffee hawking. Officials warn that such transactions weaken cooperative marketing structures, distort pricing discipline, reduce traceability, and leave farmers vulnerable to exploitation.
Financial red flags were also raised over what the report described as soft loans from private individuals and a women’s group, amounting to nearly KSh2 million. Inspectors questioned the society’s governance standards, disclosure practices, and the potential losses to third parties if the cooperative is dissolved.
The investigation concluded that Marga poses a risk to both coffee farmers and the integrity of Murang’a’s structured coffee marketing system. County authorities have admitted there were failures in the registration process and say disciplinary action has been initiated against officers involved.
The probe was triggered by complaints from officials of several established cooperatives in Murang’a, including Kamacharia, Kangunu, Kiru, New Kahuria, Kanjahi, Kiawanduma, Karuya, Nyakuru, Iyego and New Kiriti. Inspectors have urged county offices to step up farmer education and training to strengthen adherence to compliant societies and improve understanding of cooperative governance.
Marga Farmers’ Cooperative Society has dismissed the allegations as malicious and aimed at sabotaging a farmer-driven investment. The society says it plans to challenge the findings in court.
