No progress in returning coop depositors’ money
The House panel formed to probe the coop crisis has presented implementation of its report as the perfect remedy
The cooperative sector of the country has been overwhelmed by fraudulent activities like fake marriages, property transfers and divorces. What’s more, cooperative institutions have been found to prepare fake audit reports and create fictitious creditors and shareholders.
The report prepared by the Parliamentary Special Investigation Committee on Misappropriation of Cooperative Savings reveals various malpractices and illegal activities in the cooperative sector. Among the 40 cooperatives under the committee’s scanner, 22 were declared problematic, while questions have been raised about the governance of 18 others. Six of these cooperatives have transactional links with the Gorkha Media Network.
GB Rai’s role
Gitendra Babu (GB) Rai from Okhaldhunga operated seven cooperatives across the country. He exercised sole decision-making authority in all of them. Some of these institutions were new, while others had merged with existing cooperatives.
GB misappropriated nearly Rs 8.84bn in deposits from these cooperatives. Funds were misappropriated from Supreme Savings and Credit Cooperatives in Butwal, Sahara in Chitwan, Suryadarshan in Pokhara, Samanata in Banke, Swarnalaxmi in Kathmandu, Sanopaila in Birgunj and Hamro Naya Krishi Cooperative.
Chartered flight for spouse
GB remains under intense public scrutiny, yet police have not been able to arrest and investigate him. According to the committee’s report, GB chartered helicopters using cooperative deposits to celebrate his wife’s birthday in exotic locations like the Everest Base Camp.
“This is an example of how they misused the depositors’ money,” said committee chair Surya Thapa. “We found various types of misuse of cooperative funds during our investigation.”
The top defaulter
Shivashikhar Multipurpose Cooperative Limited in Kaushaltar, Bhaktapur, tops the list of cooperatives in terms of misappropriation of deposits. The cooperative now has a total liability of Rs 10.91bn, according to the report. This comprises savings, interest due on savings and various tax obligations to the state.
Shivaashikhar was formed through a merger of Shivashikhar Agriculture Cooperative with Shikhardeep Multipurpose Cooperative some five years ago. Kedar Nath Sharma was the chairperson of both institutions prior to the merger.
Per the report, the cooperative had mobilized savings without proper asset and liability management, resulting in a significant imbalance between assets and liabilities.
According to cooperative regulations, members cannot get new loans till the repayment of initial loans. However, Shivshikhar repeatedly disbursed Rs 674.2m to 24 members through 72 loans.
Other cooperatives that misappropriated billions include Sri Laligurans, Agriculture Development, and Sumeru of Lalitpur; Kantipur, Gorkha, Swarnalaxmi, Oriental, Capital, Gautam Shree, Jestha and Kumari of Kathmandu; and Ideal and Sanopaila of Birgunj.
These cooperatives owe Rs 634.2m in various taxes to the government and Rs 1.38bn in interest to depositors for their savings.
A silver bullet?
Committee chair Thapa has a simple solution to the crisis: the implementation of the committeé’s recommendations.
Since 1967, various state-commissioned committees, commissions, study teams and special committees have ‘studied’ cooperative institutions and submitted their reports to responsible authorities, but their recommendations have largely gone unimplemented.
This parliamentary special investigation committee is the 13th such committee and the first first committee formed by the parliament whose recommendations were passed unanimously and submitted to the government for implementation.
Submitted in mid-September, the committee’s report has recommended establishing a cooperative authority within three months and, until then, supervising cooperatives with total assets exceeding Rs 500m under the Cooperative Act and Nepal Rastra Bank Act (amended March 2024).
The committee has recommended conducting audits of cooperatives by auditors registered with the Cooperative Authority and classifying cooperatives into A, B and C categories based on capital and financial mobilization capacity for regulation. It has also suggested dissolving the National Cooperative Development Board and Cooperative Department after the establishment of the Cooperative Authority.
Warning of protests
Meanwhile, Kushalabh KC, central chairperson of the Cooperative Depositors Victim Protection National Campaign, has accused the government of taking no action on cooperative victims’ demands. “No matter how much we shouted, the government didn't listen. We are preparing for decisive street protests on Dec 20,” he said. “No one will return home until concrete decisions are made.”
He said the government hasn’t implemented written agreements made repeatedly.
Kiran Shrestha, chairperson of the Suryadarshan Savings Victims’ Struggle Committee, accused the government of not taking concrete steps to return the depositors’ money. “The government seems occupied only with arrests, actions and controlling protests with no discussion on returning the savings.”
According to Shrestha, 1,050 people have filed complaints seeking the return of their deposits parked in Pokhara-based Suryadarshan Cooperatives alone.
In response to the concerns about the gobbling up of the depositors’ funds, Minister for Land Management, Cooperatives, and Poverty Alleviation Balram Adhikari said that preparations are afoot to establish a cooperative authority as per the parliamentary committee’s recommendations. “Work has not gained momentum because there is a lack of clarity on whether the authority will be under the central bank or the government,” he added.
related news
Subhankar Sen: MAK is providing the best propositions to the customer
Nov. 21, 2024, 1:09 p.m.
Tracing the roots of Dolakha’s Newars
Nov. 21, 2024, 10:16 a.m.
A great wall divides NC and UML
Nov. 21, 2024, 2:40 a.m.
Indore model: A blueprint for Kathmandu’s waste crisis
Nov. 20, 2024, 11:57 a.m.
Journey from Tom and Jerry to Mystic Kitchen of Nepal
Nov. 20, 2024, 11 a.m.
Overloading, poor infrastructure behind rising road accidents in Karnali
Nov. 19, 2024, 10:46 p.m.
Cookbooks to the rescue
Nov. 19, 2024, 2:13 p.m.
Puja Mahato: This victory belongs to all Nepalis
Nov. 19, 2024, 1:46 p.m.
Comments