Depositors at receiving end as co-op operators flee with cashThe trend of cooperative operators embezzling funds and fleeing is on the rise.
Four months ago, Ram Prasad Sah, operator of a Nagwa-based Jana Kalyan Cooperative, fled after embezzling Rs30 million. On Tuesday, operators of Himalaya Saving and Credit Cooperative based at Maisthan Suresh Shrestha and Mohamad Ali Hussain ran away after misappropriating Rs50 million.
The trend of cooperative operators embezzling funds and fleeing is on the rise. The police have arrested Sah, but the depositors are yet to get back their money.
More than 150 depositors have filed complaints at the District Police Office. “We are receiving an increasing number of complaints,” said DSP Hobindra Bogati. “As of now, complains have been filed claiming misappropriation of more than Rs50 million.”
Most of the depositors are daily-wage earners having deposits ranging from Rs3,000 to Rs400,000. Bogati said as the operators do not have any property registered in their names, it is difficult to recover the money even after they are arrested. “The depositors are also not aware,” he said. “Besides, there is not proper monitoring from the authorities concerned.”
Makhu Paswan, a depositor from Nagwa, said he has been saving Rs200 daily for last three years. “I have been saving money for my daughter’s wedding,” he said. “After the operators fled away, I am under depression.”
Two years ago, operators of Jay Shree Laxmi Saving and Credit Cooperative fled. Around 900 depositors, including vegetable sellers, rickshaw pullers, daily wage earners and small entrepreneurs had deposited around Rs 40 million in the cooperative.
“People are lured by higher interest rates and slogans of the cooperatives. They deposit their hard-earned money without proper background check,” said Birendra Raj Kandel, chairman of Sahayatri Saving and Credit Cooperative. “Such depositors are often cheated.”
He said the people often fail to check basic facts like background of the promoters and operation areas of the cooperatives.
According to Raju Sah, chief of Division Cooperative Office Parsa, the existing Cooperative Act allows anyone with a citizenship to establish and run cooperatives, which is the root cause of the problem.