Draft bill to amend cooperatives act ready
Powerful panel to be formed to return money stuck in troubled co-ops
KATHMANDU, March 2:
Ministry of Cooperatives and Poverty Alleviation (MoCPA) has sent the draft bill to make amendment to the Cooperatives Act 1992 to Prime Minister Sushil Koirala, also the minister for MoCPA, for final approval before tabling it to the cabinet.
The ministry plans to introduce the law as an ordinance.
The government is making amendment to the cooperatives law to pave the way for formation of a ´powerful cooperatives assets management committee´ to return people´s deposits stuck in dozens of troubled cooperatives.
“The final draft was sent to Prime Minister Sushil Koirala for the approval a week ago after getting feedbacks from the Ministry of Finance, Nepal Rastra Bank, and Ministry of Law and Justice,” Suresh Pradhan, joint secretary at MoCPA, told Republica. “The draft will be forwarded to the cabinet once it is approved by Prime Minister Koirala to introduce the amended law through ordinance.”
According to MoCPA officials, PM Koirala is likely to approve the draft within a day or two.
The amendment is being made as per the recommendations made by a commission led by Gauri Bahadur Karki in May last year. The commission, which was formed in November 2013, had recommended to the government to form a powerful committee to return deposits mobilized by the troubled cooperatives.
"The committee, which will be formed as per the law, will have the jurisdiction to take over the troubled cooperatives and manage their assets and liabilities,” Pradhan said. “The committee will be formed once the amended law comes into effect through ordinance.”
MoCPA officials said 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 of the Karki-led commission, as many as 12,962 people have filed complaints against 150 troubled cooperatives and made claims against them 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.
Officials say the new law will offer relief to people whose money has remained stuck in troubled cooperatives.
In the draft, the ministry has lowered prison term for cooperative frauds. Earlier, the ministry had proposed prison term of up to 20 years for the fraudster. Similarly, it has proposed making fraudster payback the claimed amount and levying fine equivalent to the claimed amount on him/her.
“Following deliberation on the draft amendment, we have agreed to lower the maximum prison term to seven years,” an official of the MoCPA told Republica.
The existing law authorizes cooperatives registrar to impose a fine of up to Rs 1,500. Similarly, the government can slap prison term of up to four years on cooperative frauds as per the Civil Code.
Source: Republica
