The authorities have nearly completed the process for taking action against 30 multi-purpose cooperatives. Earlier 31 multi-level marketing (MLM) companies had their registrations cancelled on the ground of obtaining those on submission of false documents and papers. With the country witnessing a series of financial and business scandals, the authorities at one point had to step in to restrict such businesses. Of the three most sensational financial scams involving Jubak, Destiny and Hallmark, the first two carried on multi-level marketing business. The latter, a group of companies, was mainly involved in a banking scandal. The state minister for rural development and cooperatives has disclosed in reply to a question in parliament that action would soon be taken against the staff of as many as 30 multi-purpose cooperatives, including the Destiny Multi-purpose Cooperative Society Ltd. What is more, the clients of Destiny have been assured of getting their money back following due process.
In fact, the proliferation of such cooperatives and MLM businesses was very alarming. Their so-called micro-credit programmes promised outrageously high return on the clients' deposits within a short time. Soon such promises proved false and officials and lower staff of some of those organisations simply melted in the thin air overnight. In most cases, it is the poor people who could not resist the temptation of making fabulous profit on their profit were falling in a trap. Many of the companies and societies were busy laundering the deposited money. But the state minister for rural development and cooperatives claims that the Destiny top bosses could not siphon off the money and 'its property and assets are under watch'. This is rather news to many because earlier it was given to understand that apart from the immovable property and some other assets, the organisation had completed sending the major portion of its fund abroad through illegal channels. This confusion needs to be clarified. In the case of Jubak, many of its clients turned simply paupers but its organisers or officials could not be brought to justice.
However, the government deserves appreciation for tightening the noose around the Destiny's neck. If proper action is taken, it will definitely act as a deterrent to such financial fraud. That the investigation against the Destiny staff is near completion is good news. But let it not be protracted any longer in the interest of the hapless clients and also in order to drive home the message that such a criminal practice will not go unpunished. Along with the Destiny, other such companies and cooperative societies responsible for cheating simple and unsuspecting people should also be given the punishment they deserve. Even more significant is the confiscation of their property and assets before they can dispose of those. If this is done with a firm commitment in order to pay back at least some of the money they deposited, the clients will at least have some wherewithal for a turn-around in their fortunes.
Dealing with fraudulent cooperatives
FE Team | Published: February 05, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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