126 co-ops being liquidated for remaining inactive

THE Division Cooperative Office (DCO) has started the liquidation process for 126 cooperatives as they have been inactive for two consecutive years. As per the Cooperative Act 1992, registrar of the Department of Cooperatives or person authorized by him/her can liquidate cooperatives which remain inoperational for two years by scrapping their licence. Of the 126 cooperatives that are being liquidated, 108 are savings and credit cooperatives. Among them are Pulset Saving and Credit, New Baneshwor; Apex Saving and Credit, Subidhanagar; Baibhab Saving and Credit, Jorpati; Ugana Saving and Credit, Bagbazaar; Suvakarma Saving and Credit, Kuleshwor and Excess Life Saving and Credit, Gongabu. According to the DCO, many of these cooperatives have not been able to hold their annual general meeting or have not received the auditor’s approval for the last two years. Despite the provision that such cooperatives are automatically declared to be inactive, a number of them have been continuing to conduct transactions. Balaram Niraula, chief of the DCO, Kathmandu, said they have planned to implement the provision strictly to prevent such cooperatives from continuing to conduct business. “Besides, the mandatory provision of the auditor’s approval helps to track cooperatives that have been submitting fake financial documents.” According to the DCO, many cooperatives have been ignoring the regulation requiring them to obtain the auditor’s approval from it. Out of the around 3,700 cooperatives in Kathmandu district, only 2,200 fulfilled the process last year. “We will track the other 1,500 cooperatives till the deadline which occurs in mid-January,” said Niraula. The office issued a public notice on Monday asking them to submit updated personal details of the board members. Similarly, it has asked them to provide corrected transaction summaries if the DCO has identified any flaws in their monthly reports. Likewise, the cooperatives have been asked to provide supporting documents that proves they have been maintaining the necessary legal compliance of the sector. Cooperatives with annual transactions of over Rs 10 million have to report to the division office while those with transactions of over Rs 50 million are required to report to the DEoC. According to the division office, only 1,100 out of the 1,700 cooperatives with transactions of more than Rs 10 million have been reporting to the office on a monthly basis.