CSD detects embezzlement of over Rs5b in four cooperative housing societies

ISLAMABAD: In a massive drive against unlawful administrative activities of cooperative housing societies, the Cooperative Societies Department (CSD) has detected misappropriation and embezzlement of over Rs5 billion in four cooperative housing societies of the federal capital, a report said.

The CDS has cancelled licences of at least 7 housing societies for their bad performance, said in the report adding that notices have been served to the defaulters. Massive reforms were introduced when the interior minister took notice after he received complaints from the effected people who were deprived by the administration of the housing societies.

The report has been submitted to Interior Minister Chaudhry Nisar Ali Khan. The minister when contacted by this scribe for his comments regarding reforms in cooperative housing societies reforms, the housing cooperative societies have to follow rules and regulations, he said looting and plundering would not be allowed. The minister expressed satisfaction over the performance of CDS.

After massive frauds in cooperative housing societies during last many decades, the concerned department in the federal capital has taken many steps during last two years to check and limit the role and influence of the powerful land mafia.

Dozens of steps taken for transparency and accountability include improvement in legislation, introduction and enforcement of new rules, asset declarations, urgent disposal of cases, capacity building and adoption of anti-corruption strategies. Question remains whether such steps and strategies will be adopted in other parts of the country or not as public at large is victim of fake cooperative societies in all parts of the country and not merely in the federal capital.

Previously, the working of societies was monopolised by land mafia. The cooperative societies department of ICT made it mandatory that one-third representation of respective department in case of employees cooperative societies will be reserved in managing committees so to minimise the role of land mafia in societies.

In a move to ensure transparency and to have a check on any possible corrupt practices, assets declarations of members of all managing committees in every year has been made mandatory. No such provision exists at any other jurisdiction outside Islamabad. The official website of the Cooperatives Department ICT has been developed for facilitation and easy access to information about societies to the members i.e. availability of bylaws, audit reports, voter lists, minutes of AGM’s, certified Maps, cause list of court cases and online complaint system. Similarly, a draft of Cooperative Societies Rules, 2016 in place of Cooperative Societies Rules, 1927 has been finalised to meet the requirements of cooperative system of the present age.

Importantly, cooperative cases are being disposed of on urgent basis and an embezzled amount of Rs100 million has been recovered. A detailed inspection of all societies conducted to ensure effective monitoring of cooperative societies. The societies have been ranked viz-a-viz their performance. Liquidation proceedings are already under process against dormant societies.

For the purpose of capacity building, two training courses one in November 2015 and the other in October 2016 were conducted by the cooperative societies department, ICT on “Cooperative Laws, Revenue Laws, CDA Bylaws Audit guidelines directions under Section 44-D 44-E. Directions were issued to all Cooperative Societies under Section 44-D 44-if the Cooperative Societies Act, 1925 in March 2016 to ensure proper working of Cooperative societies as per law and to check and to curb corrupt practices in the working of Cooperative Societies.

Audit guidelines are also issued to ensure transparency, quality and timely completion of audits and to ensure that business of the society is being conducted as per Cooperative Societies Act, 1925 Cooperative Societies Rules, 1927. All Cooperative Societies have constituted Dispute Resolution Committees to resolve disputes between members and Managing Committees at Society level to avoid delay and litigation. Supersession of three managing committees was ordered under Rule 48 of the Cooperative Societies Rules, 1927, who committed irregularities/embezzlement in affairs of societies.

Last year, ICT Administration introduced a set of reforms in audit of cooperative societies to ensure transparency in working of these societies. The Cooperatives Department decided that only credible audit firms, notified by ICAP, shall conduct the audit of cooperative societies.

The cooperative societies usually commit irregularities in purchase of land, award of development contracts and in allotment and conversion of plots. The stereotype auditors fail to point out these wrongdoings due to which violations in the cooperative societies are on the rise. The recent reforms in auditing have ensured proper financial management with objective evaluation of financial statements of the societies to safeguard funds of the members.

During the last year, the auditors have pointed out a misappropriation of Rs4.6 billion in the funds of societies. Accordingly to audit reports, corruption of Rs2.53 billion was committed in Civilian Employees Cooperative Housing Society. The auditors also observed misappropriation Rs1.4 billion in Jammu Kashmir Society, Rs210 million in Senate Employees Cooperative Housing Society and Rs500 million in OGDC Employees Cooperative Housing Society, Islamabad.

On the basis of detailed inspection, the societies have been ranked on the basis of their performance. The Department has also taken stern action against dormant societies and has liquidated 07 Cooperative Societies under Section 47 of Cooperative Societies Act, 1925 namely Ahbab Multi Purpose Cooperative Housing Society, Islamabad, Christian Cooperative Housing Society Islamabad, Islamic University Staff Cooperative Housing Society, Islamabad, NADRA Employees Cooperative Housing Society, Islamabad, Baltistan Cooperative Housing Society, Islamabad, Rail Gardens Cooperative Housing Society, Islamabad Bank Employees Cooperative Housing Society, Islamabad.

The Registrar Cooperative Societies ICT has also introduced reforms to ensure transparency in the working of Cooperative Societies giving directions for strict adherence to municipal byelaws, declaration of assets by elected members online access of information, maintenance of books of accounts and transparency in AGMs. Training sessions were also arranged to build the capacity of managements of cooperatives and to acquaint them with rudimentary laws so that they deliver better services to the members.

The administration has also accelerated the process to recover the embezzled amount and Rs96 million has been recovered during the last one year. In addition to this, the Registrar Cooperatives has handed over possession of 536 plots worth Rs2 billion to the members of various societies.

Registrar cooperative, Mohammad Ali when contacted by this correspondent, said that recovered embezzled money would be deposited in the accounts of relevant cooperative housing societies for the development.

Article source: https://www.thenews.com.pk/print/209504-CSD-detects-embezzlement-of-over-Rs5b-in-four-cooperative-housing-societies