Recommending action against 4 people including the then Managing Director of Gorkha Media Lamichhane [Excerpt from Report]

This is part of the report

suggestions and recommendations The

committee is focused on the four mandates received from the House of Representatives and the following suggestions are recommended:- Regarding

assignment one

1. Ensure that such person is pre-trained before registering the cooperative organization, if it is not possible only from the government, arrange to give authority to the training service providers of the private sector as well,

2. Determining the limit of the maximum savings that can be kept in the cooperative and the maximum loan that can be taken, strictly complying with it, making it effective to disclose the source of the amount that the savers bring according to the law,

3. Cooperative Authority should be established as an autonomous organization to work in direct coordination with the Ministry of Cooperatives and Nepal Rastra Bank as a Second Tier Institution (STI) for the regulation of cooperative organizations. While establishing the authority, the following points should be taken into account:-

• Granting the operating license of the cooperative, regularly regulating (issuing rules or giving instructions) and supervising, implementing the conditions that appear during the supervision, and should be given the right to take action if not,

• Savings and loans All cooperatives and associations at all levels of financial transactions should be given the right to regulate, supervise, implement and take action,

. To be appointed to represent,

• Determining the qualification, selection, recruitment, promotion and transfer of necessary expert manpower (such as cooperatives, banking, chartered accountants and management) within this body and institutional memory should also be given attention,

• Cooperatives with total assets of more than 25 million rupees must obtain a financial transaction license within 6 months from the date of establishment of the authority. Rights should be given,

• When the National Cooperative Development Board and Cooperative Department are no longer needed after the establishment of the authority, legal arrangements should be made to transfer assets and liabilities,

4. Until the establishment of the authority, the joint monitoring team of Nepal Rastra Bank and the Department of Cooperatives should give priority to the monitoring of cooperatives, giving priority to cooperatives that have large financial transactions,

5. In urban or semi-urban areas where the presence of banks and financial institutions is dense, giving priority to integration by taking a policy of maintaining a small number of savings and credit cooperatives, expanding cooperative banks to the provincial level as needed,

6. It would be appropriate to regulate cooperatives by dividing them into A, B and C categories based on their capital/financial operational capacity,

7. To arrange for the audit of cooperative organizations to be conducted by the auditors listed in the Cooperative Development Authority and to monitor the cooperative organization at least once every year and to make legal arrangements to mention whether the conditions of monitoring have been implemented during the audit of the financial year,

8. Based on schedule 5, (7) and (9) of the constitution, regulations and standards should be made by the association and the provinces and local levels should take initiatives to make the registration and records and governance system effective and the authority to regulate should be established at the federal level by redistributing and reorganizing the regulations,  ;

9. Cooperative Authority should be established within three months, until establishment Cooperatives Act, 2074 and Nepal Rastra Bank Act, 2058 based on the audit report of the end of June 2081 based on the amendment of the Cooperative Act, 2074 and Nepal Rastra Bank Act, 2058 with total assets of 50 million rupees or more or doing financial transactions. The institution should be regulated and supervised by Nepal Rastra Bank according to the Nepal Rastra Bank Act, 2058,

10. In cooperative law, the state should see if there is a problem of investment while working in good faith, and if there is a small loss, the members should compensate for the loss and if the organization is in trouble due to dishonesty, the procedure according to the law should be followed, and the cooperative law should be made up-to-date by making arrangements.

11. To promote productive and service-oriented cooperatives for the purpose of economic, social and cultural upliftment of cooperative organizations by making them member-centered and community-based in the collective efforts of members,

12. To cancel the registration and dissolution of the cooperative organizations which are operating contrary to the cooperative values, recognition, principles and prevailing cooperative laws, which have acted contrary to the purpose set in their regulations and are inactive, appoint a liquidator and distribute assets and liabilities by appointing a liquidator to bear the expenses,  ;

13. Not allowing federations and associations to conduct savings and loan transactions like initial cooperatives,

14. Collecting the good practices of the cooperative associations across the country and including them in the training courses given by the center and spreading the word through training, including them in the curriculum of schools and universities. Regarding

assignment two

1. According to the provisions of the Cooperative Law, Savings and Credit Protection Fund, Debt Recovery Tribunal, Credit Information Center and Savings Insurance shall be managed as follows:-

• Credit Information Center: When disbursing a loan, information must be obtained from the Credit Information Center. It is easy to decide whether or not to provide more loans when the borrower knows where and how much the loan is being taken from. A way to know a person's financial health is through a credit information center. Currently, the credit information center opened for banks and financial institutions including Nepal Rastra Bank is providing credit information to banks and financial institutions. Although there is a provision in the law for cooperatives, as the credit information center has not been established, its inevitability has been felt. Since it takes more time and cost to establish and operate a separate organization, the credit information center can be managed without providing legal authority and resources within the existing credit information center. It is also effective for borrowers who take loans from cooperatives and banks and financial institutions.

• Savings insurance: Banks and financial institutions have a provision to insure deposits up to 5 lakh rupees per individual account. For this, 9 billion from the government and 1 billion from Nepal Rastra Bank. Deposit Insurance and Credit Protection Corporation established with an investment of 10 billion. Although there is a provision in the law to establish a savings and credit protection fund for savings and credit cooperatives, it has not yet been established. Since it takes a lot of time and cost to establish a separate Savings and Credit Protection Fund, it is appropriate to arrange an arrangement to insure the amount of savings and credit cooperatives up to a certain limit through the existing Deposit and Credit Protection Fund. Insurance should be made mandatory by amending the law as per the requirement.

• Debt recovery tribunal: Although there is a debt recovery tribunal for the debt recovery of banks and financial institutions, the debtors could not be made responsible due to the absence of a debt recovery tribunal as provided in the cooperative law. For this, it is appropriate to extend the responsibility of looking after the loans of the cooperatives by equipping the debt recovery tribunal with manpower, legal authority and resources.

2. Under the supervision of the government, the directors of the cooperatives in trouble will have to freeze their real estate, bank accounts, passports and travel permits in the name of themselves and their household members, and if they go outside the city where the cooperative's head office is located, they will have to obtain the permission of the relevant government agency to open a regular office. Set a certain period for it, if it cannot be fully resolved within that period, give time to manage by going to legal action again,

3. After the problematic announcement, for managing the assets and liabilities of the cooperative, from the problematic cooperative management committee, the cooperative went to the field, opened an office and deployed a dedicated team to manage in takeover style,

4. In order to solve the current cooperative crisis, the government should intervene appropriately, and the amount of small savers up to five lakhs will be returned through the authority by issuing an internal bond (Bond) in the guaranty of the government, and the government will later make programmatic arrangements to recover the same as the government balance. Facilitating return by bringing source disclosure under the scope of tax,

5. To implement the following measures regarding troubled savings and credit cooperatives:

(1) Investigate the details of all transactions of troubled savings and credit cooperatives and find out the true situation,

(2) Legal action will be taken against those who misappropriate the amount of the cooperative as a loan and misappropriation of the loan, confiscation of their movable and immovable assets,

(3) Returning the money of the savers after collecting the loan, confiscating the assets invested by the cooperative and bringing it to the name of the government, and the government returning the savings of the small savers and after collecting the loan, taking that amount as a deposit,

(4) of the savings and loan cooperatives Establishing a second level regulatory body for regulation and supervision.

6.

to implement the cooperative revival plan including the following programs • To increase the contribution of the cooperative sector in the country's production, self-reliance and industrial development process,

• Regaining the trust and credibility of the cooperative sector, which is currently lost due to some cooperatives,

• Punish the embezzlers of savings,

• Recover the embezzled amount from the concerned,

18.1.3 Regarding task three

1. Winding up accounts of distressed cooperatives: Cooperatives that have been declared distressed generally have a very slim chance of being reactivated. In order to adjust the accounts of each cooperative, in view of the size of the latest financial transactions of the cooperative, a dedicated team of 3 to 5 people including banking experts, cooperative experts and chartered accountants should be formed by the organization and provide specific mandates and procedures, and from the same working group, the right to transfer assets and liabilities to re-operation or cancellation. to do

2. Regarding the return of the savings of the savers of the troubled cooperatives, it seems that the return plan should be carried forward based on priority:-

a. Returning savings from institutional assets (first stage)

• Stopping the institutional assets of cooperative organizations and the immediate assets of their directors and associated persons,

• Cooperative organizations that engage in illegal transactions within their respective responsibilities at the central, provincial and local levels and with them Taking over the property of the related persons, selling it, collecting debts, making legal and institutional arrangements to carry out actions such as returning the deposits of depositors,

• Illegal trading cooperatives and their directors and other involved persons Preparation of assets inventory,

• Taking charge of the institutional property system according to the inventory,

• Collecting the loans invested by the organization as government debt,

• Converting (selling) the immovable assets of such organizations into movable assets,

• Savings Determining the ratio of the amount to be returned based on the priority and available assets,

• Returning the savings in the order of priority as determined.

b. If institutional assets are insufficient, return them from personal assets (second stage)

• Take control of movable/immovable assets of directors/affiliated persons and family members and others involved,

• Turn immovable assets into movable assets (sell them),

break • Determining the ratio of the amount to be returned based on the depositor's preference and available assets,

• Returning the savings according to the determined preference.

3. As cooperative organizations become problematic, the offices may be closed and the directors may also be suspended or jailed. When the saver's savings are taken as mortgages, the interest is also capitalized. Recommending the Government of Nepal to write to the banks and financial institutions through Nepal Rastra Bank for necessary coordination regarding recovery of the loan amount and providing the remaining amount to the troubled cooperative management committee.

4. Cooperative organizations have seen problems such as setting up some fake debtors to show the balance of capital flow or not deducting the amount of debts that have been repaid, this should be improved. Regarding

assignment four

1. There is no dispute about the flow of funds from the cooperatives to the company, as there is no legal provision for investing or transferring funds from the cooperatives to the private company, to strictly follow the legal arrangements by stopping the actions contrary to the said law,

2. Instead of investing in private companies, promoting production-focused cooperatives and encouraging them to establish their own brand and providing facilities such as tax exemptions to cooperative-businesses,

3. Suryadarshan Savings and Loan Cooperative Society Ltd., Pokhara, Supreme Savings and Loan Cooperative Society Ltd., Butwal, Swarnalakshmi Multipurpose Cooperative Society Ltd., Kathmandu, Sahara Chitwan Multipurpose Cooperative Society, which transferred funds to Gorkha Media Network Pvt. Ltd. against the Cooperative Law Ltd., Chitwan and Sanopaila Savings and Loan Cooperative Society Ltd., Birganj and all those involved in the decision-making process are recommended to the Government of Nepal to send them to the relevant authorities for action according to the law, similarly Image Savings and Loan Cooperative Society Ltd. Recommending to the Government of Nepal to send cooperatives, Sumeru Savings and Credit Cooperatives Ltd., IME cooperatives and similar cooperative organizations that have acted against the law and everyone involved in the decision-making process to the relevant agencies for action according to the law,

4. Any company has its own purpose and mission. The directors or shareholders of a company are primarily responsible in such an entity. Share members, board members and the characters in the roles and responsibilities of the managing director should not be held responsible and liable for the amount received in the company. Account signatories who participate in the operation of the account, i.e. finance operations, must assume responsibility for the same. After the money of the savers in the cooperative organization was irregularly entered into the account of Gorkha Media Network Pvt. Ltd., since it was seen that they were involved in the process of spending the money, the directors, chairman

Gitendrababu Rai and member Kumar Ramtel and the then management Director Ravi Lamichhane and director Chabilal Joshi as partners in company during the period they were responsible for the amount received from the cooperative to the company, recommending the government of Nepal to take action according to the prevailing law, 5. Also, Gitendrababu Rai, Than Bahadur Budha Magar-Suryadarshan Pokhara, Dinesh Rokka-Sahara Chitwan, Sagar K.C.-Supreme, Butwal, Pichkan Khatun-Sano Paila, Birganj and Bhupendra Rai-Swarnalakshmi, Kathmandu, who are absconding for misappropriation of cooperative savings ; Instructing the government of Nepal to quickly search and bring it into legal scope,

6. The committee has asked the government of Nepal through the Ministry of Home Affairs to investigate and present it. Other fugitives who have been directed to be brought to justice immediately Recommending action to be taken on saving embezzlement as soon as possible,

7. Similarly, all directors, decision-makers and key officials of the company who take money from other cooperative organizations through illegal process and spend the money mentioned in schedule-2 shall be held responsible and accountable for the money received in the company during the period of their tenure. To recommend the Nepal government to do accordingly,

8. Gorkha Media Network Pvt. Ltd. Among other things, when buying and selling shares in companies, it is found that the payment instruments and instruments submitted as per law are not complete, but the purchase and sale is based on the purchase and sale paper, by making sure that the payment process is complete, and to make binding arrangements regarding the payment of the corresponding tax, and to study the legal arrangements related to white shares, and make necessary and appropriate arrangements. Recommending to Nepal government to draw the attention of related agencies.

18.2 Other suggestions

1. A balance between promotion and regulation is necessary to strengthen and sustain Nepal's cooperative movement. The central association, subject central association, provincial association and district level associations should coordinate with each other and work with focus on transparency, ethics and the best interests of the members.

2. To improve the regulation and management of the cooperative sector in Nepal, it is imperative to make the legal provisions clear and consistent. Coordinating federal, provincial and local laws should create a uniform legal framework, which will facilitate coordinated implementation.

3. To ensure the effectiveness and sustainability of the cooperative sector, the savings and loan business Apart from services, it is necessary to focus on other cooperative activities such as agriculture, consumer and community development.

4. Along with the numerical growth of the cooperative sector, quality education, training, and monitoring should be well managed to focus on quality.

5. For the effective monitoring and supervision of the cooperative sector, it arranges the appointment and immediate filling of posts with subject experts in the regulatory bodies with the necessary resources at the union, state and local levels.

6. Registration of savings and credit cooperatives, expansion of offices and service centers should be stopped and attention should be focused on effective regulation.

7. It is necessary to make the discretionary authority of the chief administrative officer of the cooperative responsible and accountable, and make transparency and the consent of the members mandatory in the service expansion and integration (merger) process of the cooperatives.