Cleanse Cooperatives

The cooperative sector, designed to serve the interests of its members through mutual assistance and profit sharing, has been marred by increasing instances of irregularities, undermining trust and causing significant financial losses to its members. The involvement of even high profile people in the cooperative fraud has posed a significant challenge for the government to resolve cooperative issues, but the government has expressed its resolve to carry out investigations and bring the guilty to book. As such, it should not be made just a political issue but a matter for fair and thorough probe and those found to be involved in the fraud should not be spared as per law of the land. 

The cooperative sector if managed well could bring a revolution in collecting scattered finances and investing in productive sectors, but unfortunately, there are many instance of hard-earned money of the depositors being embezzled and the victims being unable to retrieve their savings. The concerned victims often complain of being unable to manage their household expenses as their savings get embezzled.  Most of these victims have called on the government to catch and punish those responsible for embezzlements. 

The House of Representatives on Tuesday formed a seven-member probe committee headed by CPN-UML lawmaker Surya Thapa. The committee will examine cooperatives in crisis, focusing on their legal and institutional objectives, financial structures, regulations, oversight and transparency. Then it will provide recommendations to the government. Additionally, the committee will suggest measures to ensure the prompt return of savings to depositors of the troubled cooperatives identified by the Department of Cooperatives and the Crisis-ridden Cooperative Management Committee. 

Cooperative victims have been staging protests for a long time demanding the government resolve their issues, and help them retrieve their funds. Deposits amounting to billions have reportedly been misappropriated, and victims are far from getting justice.  Most of the cooperative victims are the daily wage earners and labourers, and are vulnerable members of society. Those involved in the irregularities are those who are well versed of the loopholes in the system but the law of the land should not allow them to get away with the depositors' savings. Cooperative rules and regulations need to be reformed in such a way that depositors are not given a rough deal. 

The cooperative fund belongs to the cluster of the depositors but it is not a pet fund that can be misused to fulfill one's own vested interests. There must be a clear investment guideline so that the money collected by a cooperative is invested in productive sectors. This way, the cooperative movement can make a creative contribution in national development and prosperity. It seems that Nepal's cooperatives are taking undue advantage of de-regulation and laxity in monitoring. Government monitoring should be so effective that things can be brought under rule before they spiral out of control in corrupt way. 

Nothing should prevent the government from taking decisive action. In addition to catching the defaulters, authorities must reclaim the savings by confiscating the fraudsters' assets, mobilising all available resources, and taking legal action. The depositors, who are the real shareholders, must have a say in the appointment of staff and the decisions to be taken by the executive committee. If they are influenced upon to take faulty decisions, there must be a mechanism for filing complaints so that frauds can be nipped in the bud.