Kathmandu, December 6

Though the Ministry of Co-operatives and Poverty Alleviation has shown assertiveness to compensate the victims of the cooperatives (mainly savings and credit cooperatives and multi-purpose cooperatives) by seizing their property after enforcement of the Cooperatives Act, the Ministry of Finance (MoF) has been dilly-dallying in granting its approval to the proposal to form a high-powered committee for confiscation of assets of the fraud cooperatives.

MoF officials concerned with this issue declined to make any comment citing that the proposal is under consideration.

The MoF needs to provide consent to form the committee titled ‘Problematic Cooperatives Wealth Management Committee’ as envisioned by the Cooperatives Act. However, the MoF has not sent its consent since last one month. A month ago, when the act was enacted after receiving the president’s seal, the Ministry of Co-operatives and Poverty Alleviation had announced Oriental Cooperative as ‘problematic’ to pave the way to form a committee to compensate the victims of cooperative scam that dated some five years back.

As per the provision of the act, the committee will be formed under the chairmanship of a former judge of the Appellate Court or equivalent legal professional, and comprise representatives from the National Cooperatives Federation of Nepal, and joint secretary of the government who has expertise on the issue. The under-secretary of the Ministry of Cooperatives and Poverty Alleviation would work as the member secretary of the committee.

The high-powered committee would only have the right to summon the chairman and executives of all the troubled cooperatives to seek their commitment to compensate victims within a certain time or confiscate and liquidate the property to compensate the depositors if the promoters of the cooperatives do not come in contact.

After the fraud committed by the cooperatives came to light, the government had formed a Cooperatives Investigation Commission led by former chairman of the Special Court Gauri Bahadur Karki in November of 2013. The commission submitted a report stating that 160 cooperatives had scammed depositors into parking a total of Rs 11.41 billion, with 82 per cent of the depositors from Kathmandu Valley alone.