Conflict of Interest: Taskforce urges swift separation of family members in cooperative roles

KATHMANDU: The ‘Cooperative Sector Reforms Recommendation Taskforce, 2080’ has submitted its report, outlining a series of measures to tackle challenges within the country’s cooperative sector, spanning short-term, mid-term, and long-term strategies. This task force was established by the government on May 9.

One of the key recommendations from the task force is that loans exceeding 10 percent of the total amount to an individual or household must be resolved within a six-month timeframe.

Additionally, the task force advises that within three months, individuals from the same household and close relatives who serve on the Board of Directors, audit committee, or in a management capacity should be separated to avoid conflicts of interest that may compromise service quality.

The task force also calls for the transformation of cooperative investments into various companies, markets, and apartments to be converted into liquid assets within one year. Furthermore, cooperative organizations unable to reimburse depositors should utilize investments from other sectors and the fixed assets of founders to meet their obligations.

To enhance risk management, cooperatives are urged to develop comprehensive action plans and notify their regulatory body and central association. The task force proposes that the passports of responsible office-bearers and those involved in the management be temporarily suspended in cases of embezzlement of depositor collections.

In an effort to streamline operations, financial transactions, lending, savings, and loan disbursement within parallel organizations should be resolved within a one-year period, according to the recommendations.

The task force highlights the importance of continuous monitoring, feedback mechanisms, and a system of rewards and penalties for cooperative entities.

Furthermore, the task force’s report underscores that the current issues in cooperative organizations stem from a shift in investments by family-run cooperatives towards real estate, apartments, stores, and various other businesses.

To promote transparency within organizations, the task force suggests fostering consultations and regular meetings among the board of directors and management teams of cooperatives, along with consistent information dissemination.

Dr. Jaykant Raut, a member of the National Planning Commission, led the task force, with Gokarna Mani Duwadi, Secretary at the Ministry of Land Management, Cooperative and Poverty Alleviation, Kashi Raj Dahal, Chairman of the Sick Cooperatives Management Committee, and others serving as members.

Fiscal Nepal |
Friday September 15, 2023, 01:21:30 PM |

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