Cooperatives in Lumbini: Protests erupt as one billion rupees embezzled

Butwal, August 13: It has been nearly a year since the Supreme Cooperative at the Butwal Chauraha intersection was shut down. The cooperative’s chairman, Om Gurung, is currently in jail due to his failure to return funds to over 1,000 savers. However, the police have yet to apprehend GB Rai and manager Naresh KC, who are also implicated in the misappropriation of the cooperative's funds. A case has been filed against 28 individuals, including Rai, at the Rupandehi District Court for the embezzlement of cooperative funds.

Similarly, the Shiva Shikhar Cooperative in Yogikuti, located just 5 kilometers from the Supreme Cooperative office, has also been closed for a year. This cooperative has left 400 savers unable to reclaim approximately 30 million rupees of their deposits. The situation is equally dire for savers of the Namaste Sahakari in Nepalgunj, Banke district, who have been unable to recover their money. The owner and manager of Namaste Cooperative are currently missing, prompting the Lumbini Province Cooperative Registration Office to send a report of fund misappropriation to the District Police Office in Banke. The police are now gathering information about the savers to file a case. In the Lumbini province alone, the number of cooperatives failing to return savers' money has reached 21, affecting nearly 10,000 savers.

Madhu Krishna Paudel, head of the Lumbini State Cooperative Registration Office, stated that complaints have been received against 21 cooperatives to date. He assured that necessary actions are being taken to address the issue. In the financial year 2079-80, action was initiated against 17 cooperatives, and in the subsequent year 2080-81, five more cooperatives have been added to the list.

Tikaram Pokharel, the Executive Vice President of the Cooperative Board for Lumbini Province, explained that way forward for problematic cooperatives could be addressed by the Council of Ministers based on legal provisions. He added that recent actions have been taken to address the issue of unreturned savings. Pokharel noted that efforts are underway to resolve the situation and ensure that the savings are returned to the investors. He emphasized that problematic cooperatives are being dealt with according to the law, and discussions are ongoing to find new methods for returning savers' money.

Despite these efforts, savers are growing increasingly concerned about the status of their funds. For example, nearly 900 million out of 1.7 billion rupees belonging to savers at the Supreme Cooperative were embezzled, and 30 million rupees were misappropriated from the Shiva Shikhar Cooperative. While some directors of these cooperatives are in custody, others remain at large. This situation has led to renewed protests from savers of the Supreme Cooperative, with Bijay Nepal, the coordinator of the Supreme Cooperative Victims Association Committee, submitting a memorandum to the cooperative regulatory body and planning further demonstrations.

Additionally, other cooperatives in Butwal, such as Visitor, Sign, Upakar, Saptadeep, Namaste, Upadesh, and Sunaulo Multi-Purpose Cooperatives, have also closed due to their inability to return savings. These cooperatives had invested heavily in small hydropower, industry, tourism, agriculture, and real estate, often with unsecured investments.

Shiva Shikhar cooperative, with its central office in Bhaktapur, owes around 30 million rupees to about 300 savers in Butwal. The cooperative’s chairman, Kedar Sharma, and the manager are currently in police custody, leaving savers uncertain about when they will recover their funds.

Bhim Tulachan, President of the District Cooperative Association Rupandehi, highlighted the problems arising when cooperatives invest their savings in sectors like real estate and vehicles instead of securing their financial obligations to savers.