The Ministry of Cooperatives and Poverty Alleviation (MoCPA) submitted a proposal to this effect to the Cabinet two weeks ago.

The ministry’s move is in line with the recommendation of a high-level commission formed to probe troubled cooperatives, which was led by former chairman of Special Court Gauri Bahadur Karki. The Cabinet had also asked the ministry to implement the recommendations of Karki-led commission.

The proposed rehabilitation commission will have the authority to confiscate property of directors of cooperatives involved in embezzling the general people’s money. “The commission will also help the troubled cooperatives recover loans and revive them,” said a ministry official.

As Karki-led commission was not fully authorised to confiscate property of the wrongdoers, it had suggested formation of an all-powerful rehabilitation commission. The Karki-led had received complaints against 130 cooperatives, with claims of over Rs 9 billion from depositors.

The proposed rehabilitation commission will also carry out Due Diligence Audit of all 130 troubled cooperatives to find their financial status.

Babu Ram Bhusal, under secretary at the Ministry, who was secretary at Karki-led commission, said the panel conducted Due Diligence Audit of only 25 cooperatives.

Recently, the Commission for the Investigation of Abuse of Authority has asked the government to form a high-level probe commission to investigate assets of Sudhir Basnet, chairman of Oriental Cooperatives, against whom the Karki-led commission had received the highest number of complaints.

The anti-graft body was concerns especially about the huge losses faced by a number of banks and financial institutions loans issued to Basnet turned bad.

Of the total 12,778 complaints registered with Karki-led panel, 11,286 were against Oriental. And, out of over Rs 9 billion in claims from 130 cooperatives, Oriental’s liabilities alone stood at more than Rs 6 billion.