Process to compensate Oriental victims begins

Kathmandu, February 20

The high-powered committee formed as per the provision of the Cooperatives Act, 2017 has initiated the process of providing relief to the victims of Oriental Cooperative.

The committee led by former chairman of Special Court Gauri Bahadur Karki will be using the rights of annual general meeting and board of directors of the cooperative to compensate the victims by seizing its property.

The Problematic Cooperatives Wealth Management Committee led by Karki has been given the authority to settle the liability of the cooperatives through liquidation of the seized property. The Department of Cooperatives has already frozen the property of problematic cooperatives.

The committee will settle the liability of cooperatives declared ‘problematic’ by the Ministry of Cooperatives and Poverty Alleviation in a series. Oriental was the first cooperative to be declared problematic by the ministry and the committee has been working to provide relief to the victims of this cooperative, according to Rewati Raman Pokharel, member secretary of the committee.

“The committee is gathering information about all the property of Oriental Cooperative and making a database of its member depositors, borrowers, and the parties that need to be paid by the cooperative based on the report of the Cooperatives Investigation Commission.”

Karki, who led the commission, is currently the chairman of the committee.

“We are collecting land and building ownership certificates and also information about any other property related to Oriental Cooperative.”

The committee is preparing to issue a notice asking the victims to submit their claims with the committee. Borrowers of the problematic cooperative have to pay back the principal and interest on the borrowed amount, otherwise they will be blacklisted and will not be able to get finance from any financial institution. Passports of the promoters of concerned problematic cooperative have also been seized.

As per Pokharel, the committee will calculate the liability by verifying the submitted claims. The cooperative act, issued some four months back, has a provision that the government has to fill the gap between liability and assets in case the liability is higher than the assets.

Oriental is the biggest defrauder, misusing an eye-popping Rs 4.20 billion in deposits and Rs 1.36 billion parked by customers for housing projects that were being developed by Oriental Builders and Developers and Kohinoor Hill Housing. Oriental had embezzled deposits of 11,840 customers, as per the committee.

Sudheer Basnet, the chairman of Oriental Cooperative, is in police custody. Basnet was operating various companies, including housing projects. His housing projects had collected money from the public against the promise of providing them apartments. Reportedly, the housing projects had even sold flats of multi-storied buildings without acquiring necessary permission from the Department of Urban Development and Building Construction.

Many banks and financial institutions, including government-owned RastriyaBanijya Bank and Employee Provident Fund, have financed Oriental’s housing projects. Dozens of commercial banks, out of the 28 in operation, have financed various projects, including land and housing development owned by Basnet.

The committee led by Karki has said that the claims of the depositors, outstanding dues to the government, those that made advance payment for the apartments and those who provided loans for the housing projects of the cooperative will be gradually rebated after liquidation of Oriental’s property.