KATHMANDU, MAY 13 -
A high-level commission formed to investigate troubled cooperatives has
proposed a new cooperatives Act with a provision of strong penalty
against those involved in irregularities.
As the existing Cooperatives Act does not have a provision of the
action to be taken against cooperatives and their promoters if they
commit irregularities, the commission has proposed stringent action
against the wrongdoers.
“In fact, the commission has drafted the new Act itself because if it
is drafted in another context or by other people, it may not address the
core issues in cooperative sector,” said a source.
The proposed Act has provisioned jail term of up to 20 years for those
involved in irregularities. They will also be subjected to pay the
misused amount plus an equivalent amount in fines, besides the jail
term. In order to recover the public deposits that have remained stuck
with troubled cooperatives, the proposed Act has recommended a strong
recovery panel, according to the source.
The commission, which was formed six months ago, will submit its report to Prime Minister Sushil Koirala on Tuesday.
Based on 12,778 complaints filed, the commission has identified 130
cooperatives as troubled. Liabilities of these cooperatives stand at Rs
9.63 billion. The government formed the commission to study the
financial status of troubled cooperatives following pressure from
victims.
Out of the 130 troubled cooperatives, the commission has so far
interrogated directors of 35 cooperatives. Mathema, however, said none
of these cooperatives have submitted their complete financial status.
Of the 12,778 complaints filed in the commission, 11,286 are against
Oriental. Oriental alone has more than Rs 6 billion in liabilities.
Donor agencies and international organizations have also expressed
concern about the misconduct in the sector. The World Bank and
International Monetary Fund have recommended upgradation of the legal
framework to regulate the unsupervised and rapidly growing sector.
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