KATHMANDU, March 21: The government has decided to make amendment to Cooperatives Act 1992 to form a 'powerful cooperatives assets management committee' to return the public deposits stuck in dozens of troubled cooperatives.
The cabinet meeting held on Thursday approved the draft amendment bill.
Officials of Ministry of Cooperatives and Poverty Alleviation (MoCPA) said the government will make amendment to the law through a 'fast track' mode.
The amendment introduces a new article about the formation of a committee to return public deposits stuck at troubled cooperatives. The amended law will come into effect after President Dr Ram Baran Yadav authenticates the cabinet's decision and issues an ordinance."
"Once the ordinance is issued, a five-member committee will be formed under the chairmanship of a former judge. The committee will take over the reins of troubled cooperatives and manage their assets and liabiliti"s," Suresh Pradhan, joint secretary at MoCPA, told Republica.
The committee will comprise of members from the Ministry of Finance, Nepal Rastra Bank, MoCPA and an expert from the cooperative sector.
According to MoCPA officials, the committee will also acquire housing apartments promoted by the troubled cooperatives and hand them over to people who have booked it.
According to the report prepared by a commission led by Gauri Bahadur Karki, as many as 12,962 people have filed complaints against 150 troubled cooperatives and made claims totaling Rs 10 billion -- Rs 7.6 billion in principal and Rs 2.4 billion in interest. The highest claim for deposits is Rs 5.5 billion against Oriental Cooperatives which is promoted by Sudhir Basnet.
Housing projects promoted by cooperatives like Oriental and Guna have not been able to hand over housing units to their customers, who have already paid the money, after their promoter companies ran into trouble."
"The amendment to the law was required for providing relief to public depositors conned by the troubled cooperativ"s," joint secretary Pradhan said.
The amendment has also provisioned stricter punishment for cooperative fraudsters. As per the amendment, government can sentence such fraudsters to seven years in jail. Similarly, they can be made to pay back the claimed amount by levying fine equivalent to the claimed amount on them.
The existing law authorizes cooperatives registrar to impose a fine of up to Rs 1,500 only. Similarly, the government can slap prison term of up to four years on cooperative frauds as per the Civil Code.
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