KATHMANDU, April 26: The government is considering seizing all the investments made by cooperatives defaulters on other organizations and the handed-over property to their family members while repaying the suffered deposit members.
Endorsing a guideline to return the money of deposit members of the problematic cooperatives, the government has enforced the stringent rule. “In case the sale of cooperatives’ assets is not sufficient to return the savers’ money, while the defaulters and their family members are found to have transferred fixed assets or invested in other companies for any specific reason that includes division of inherited property shares among siblings or divorcee, such assets will subject to freeze for transactions and could be taken to auction,” reads the guideline.
The Ministry of Land Management, Cooperatives and Poverty Alleviation (MoLMCPA) has informed that the new rules of the procedure has been published in the Nepal Gazette and has come online. The Council of Ministers has formulated this procedure at a time when the government has announced stepping up to return the money of the suffered depositors.
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Through the new rule, the government talks to establish and operate a revolving fund under the Problematic Cooperative Management Committee (PCMC) that has been mandated to accomplish the task related to the troubled cooperatives.
The procedure states that there will be a revolving fund in the committee for the purpose of returning the savings of deposit members of the cooperative organizations that have been declared problematic by the MoLMCPA and are under the vigilance of the PCMC for asset management and liability payment work.
The revolving fund will incorporate the grant amounts received from the government, auction sale of the assets of directors, accounts committee, managers, loan subcommittees and persons authorized to perform such work and persons found guilty in embezzlement of the organization's assets, savings, loans or shares. In addition to such money, the entire amount recovered from the convicted individual and the amount refunded from the concerned cooperative organizations will remain in the fund.
While returning savings, it has been arranged that the balance amount seen in the statement, record or computer system received from the cooperative just a day before the date on which the cooperative was declared problematic will be considered as the basis. It is mentioned that the savings amount of the members who have taken loans from the concerned cooperative will not be returned until the said dues are settled.
The guideline also mentioned that the savings amount of the directors, managers of the concerned organization, members of their immediate family and persons involved in embezzlement or misuse will not be returned until the liabilities of the savers who have claimed their demands are settled in accordance with the law.
A few days ago, the PCMC set a 15-day deadline and asked directors, debtor members, managers, employees, and guarantors of problematic cooperatives to repay their outstanding loans. The MoLMCPA has identified 20 problematic cooperatives to ensure prompt action.
