Punish Cooperative Frauds

Parmeshwar Devkota

Nepal's constitution has defined the cooperative as the third pillar of economy. Thousands of cooperatives are operating across the country, but scores of them have been plagued by various anomalies and frauds. Some time back Nepali Congress while in opposition demanded the formation of a special House committee to probe the troubled cooperatives. After weeks of wrangling in the House, a seven-member intra-party parliamentary committee was formed to investigate into the cause of fraud in the cooperatives and recommend solution to their problems. The committee, headed by lawmaker Surya Thapa, took three-and-a-half-months to prepare more than 800-page report. After it was presented to Speaker of the House, Dev Raj Ghimire, the government is now working to implement it.

Had the government adopted stringent measures against the cooperatives fraud, they would not have faced crisis of such proportions. Nowadays, two types of cooperatives – traditional and modern – are in operation. The origin of traditional cooperatives dates back to primitive farming age. Our ancestors prefer working in groups in the farmlands; therefore, they conceived the idea of working on a rotation basis, which is called Parma. Guthi, Dharma Bhakari and Bethi are some of the old forms of collective institutions, and some of them are still in existence. 

But, the modern cooperatives came into being after the Cooperative Act was amended for the third time in the year 1980 AD. The new generation of community-based savings and credit groups started to work ubiquitously. After the establishment of multiparty democratic system, various types of cooperatives emerged. They run multipurpose projects, mostly related to savings and credits, dairy, agriculture, fruits and vegetables, bee keeping, tea, coffee, consumers, science and technology, energy, etc.  The cooperatives that collect savings from their members and provide credits to them are in the soup in the absence of specific regulatory bodies and regulations. 

Cooperatives around the world share the common values adopted by the International Cooperative Alliance in 1995. They are characterised by self-help, self-responsibility, equality, equity, solidarity and democracy. But some of the savings and credit and multipurpose cooperatives have failed to abide by these values. Instead, they have indulged in embezzling millions of rupees that are mostly collected from the low-income people. Against this backdrop, the recommendations of House panel is important to punish the culprits and ensure justice to the depositors.

It has suggested forming cooperative authority, taking measures to secure the cooperatives and deposits of the common people, implementing insurance system and fixing the ceilings in deposits. In order to deal with hundreds of cooperatives cases, the government should adopt fast-track methods. As the legal maxim goes, justice delayed is justice denied, the law of court needs to be serious about giving justice to the victims in time so that the latter get their savings without delay. Many people had deposited their hard-earned money in the cooperatives but in many cases it is the cooperatives owners as well as employers, who ran away with a large sum of money, leaving the depositors high and dry. Therefore, the fraudsters and swindlers must be brought to book. The police will be able to punish the frauds if the government implements the committee report in letter and spirit.