The Kathmandu Valley has recorded the most number of scams involving savings, credit and multi-purpose cooperatives over the recent years.
Of the total 12, 962 cases of cooperative scams across the country, 10,648 cases registered at the High Level Commission to Probe into Troubled Cooperatives involve cooperatives based in the Kathmandu Valley.
Several of these problematic cooperatives are promoted by a single group of promoters, who have misused deposits.
The commission led by former chairman of the Special Court, Gauri Bahadur Karki, had submitted a report to the prime minister three months ago recommending formation of a cooperative tribunal to expedite fraud cases involving cooperatives. It had also recommended strong legislation against banking frauds. However, victims of the cooperatives said the government has not shown seriousness toward forming the tribunal.
According to the report prepared by the Karki-led commission, 160 cooperatives across the country were involved in fraud cases amounting to Rs 11.41 billion, deposited mostly by the general public.
Some troubled cooperatives in the Valley were found to be promoted by a single person. For instance, Rajendra Shakya, who is the promoter of Guna Cooperatives, also operates Hatemalo Savings and Credit Cooperative and Stupa Savings and Credit Cooperative.
Guna has reportedly misused Rs 662.8 million deposited by 1,268 customers. Shakya misused Rs 19.8 million by investing the amount in housing projects. Shakya is involved in Guna Colony, RC Apartment, Guna Builders and Developers, Reliable Developers, LP Apartment, GN Apartment and Guna Colony projects.
Similarly, promoter of Putalisadak-based Standard Savings and Credit Cooperative, Khem Raj Niraula, has also been found operating four other cooperatives — Prabhu Savings and Credit Cooperative, Chartered Cooperative, Kuber Cooperative, and Standard Multipurpose Savings and Credit Cooperative in various parts of the capital. According to the report, Standard Savings and Credit Cooperative alone misused Rs 536.69 million of deposits.
Sudheer Basnet, promoter of Oriental Cooperative, has misused Rs 4.20 billion deposited by 11,840 customers, who have claimed Rs 1.29 billion in interest. Likewise, Basnet misused Rs 1.36 billion collected from customers for housing projects being developed by Oriental Builders and Developers Pvt Ltd and Kohinoor Hill Housing Pvt Ltd.
Oriental’s promoter Basnet also misused Rs 190 million invested by Tara Devi Dhakal of Damak, Jhapa in one of his housing projects.
The cooperatives got into trouble following slowdown in the real estate sector. Almost all the savings and credit cooperatives were found involved in real estate. Depositors of fraudulent cooperatives have not been receiving interest and principal for the last three years, said Prof Surendra Bahadur Shrestha, one of the victims of Guna Cooperative.