It is considered that it is unreasonable for the cooperative capital, which has been built over the years for the benefit of its members as a result of good management, to now be taken away and used by the government without adequate compensation. The requirement for an outside authority approving the members of the board is also an unreasonable restriction on the rights of the members to manage the co-operatives democratically.

Co-operators feel aggrieved by several of the provisions which unreasonably restrict the fundamental liberty of members of co-operatives to associate under Article 10 of the federal constitution.

The fundamental liberty of members of co-operatives to associate under Article 10 of the federal constitution.
The fundamental liberty of co-operatives to be deprived of its property for the use of the government without adequate compensation in accordance with Article 13 of the federal constitution.
The fundamental liberty of the officers of co-operatives to be subjected to arbitrary arrest under Article 5 of the federal constitution.
Section 43 (1) of the Malaysian Cooperative Societies Commission Act 2007 requiring all cooperative societies to deposit their funds not immediately needed for operations or investments into the Cooperative Deposit Account and Section 42(2) of the Act requiring cooperative societies to pay a percentage of its share capital, subscription capital and assets to the Central Liquidity Fund without providing for adequate compensation for the compulsory acquisition for use of the funds is inconsistent with Article 13 (2) of the federal constitution and is therefore invalid pursuant to Article 4 (1) of the federal constitution.
Section 42 (1) of the Malaysian Co-operative Societies Commission Act 2007 enables the Malaysian Co-operative Societies Commission to compel any cooperative society by order in writing to contribute to the Central Liquidity Fund established under Section 42 of the Act and money howsoever raised or received by the federation and ought to be paid pursuant to Article 97 of the federal constitution to the Federal Consolidated Fund from which withdrawals are permitted in the manner stated in Article 104 of the federal constitution and Section 42 (1) of the Act is therefore invalid under Article 4 (1) of the federal constitution for being inconsistent with the federal constitution.
Section 54 of the Malaysian Co-operative Societies Commission Act 2007 which stipulates that every offence punishable under the Act, the Co-operative Societies Act 1993 or any other written law enforced by the Malaysian Co-operative Societies Commission shall be a seizable offence and that a police officer not below the rank of inspector or an Investigating Officer may arrest on reasonable suspicion without being required to state the reasons for the arrest is inconsistent with Article 5 (1) and (3) of the federal constitution which provides that no person shall be deprived of his life or personal liberty save in accordance with the law and further requires that the person arrested shall be informed as soon as may be of the grounds of his arrest and be allowed to consult and be defended by a legal practitioner of his choice and the said Section 54 of the Act is therefore invalid under Article 4 (1) of the federal constitution.
Section 43 (2) of the Co-operative Societies Act 1993 (as amended by the Co-operative Societies Amendment Act 2007) requires that a co-operative society shall, prior to the appointment or re-appointment as a member of the board of a co-operative society, seek verification from the Malaysian Co-operative Societies Commission on whether such person satisfies the fit and person criteria as , seek verification from the Malaysian Co-operative Society be specified by the Malaysian Co-operatives Societies Commission is inconsistent with the citizens' fundamental right of freedom of association guaranteed by Article 10 (1) of the federal constitution and not excepted by Article 10 (2), 10 (3) or 10 (4) of the federal constitution.

Safeguarding interests of members

This legal action has to be initiated to safeguard the interests of its members and their savings.

The co-operatives are distressed over this gross denial of justice and millions of members of co-operative societies in Malaysia were awaiting a review “by all and any means” of the Co-operative Act based on the points raised in the Courts.

Meantime, the Co-operative Societies Commission of Malaysia is continuing issuing guidelines which are said to be mandatory at this stage based on the provisions of the Revised Act which the co-operatives are completely against. The co-operatives consider these guidelines to be ultra vires and a contempt of court.

Members of co-operative societies wishing to stand for election as directors must now obtain the written permission of the commission after going through a gamut of procedures.

Reserves which had in past years been created for future shortfall in dividends on share capital cannot now be used to pay the current year’s dividends without the prior written approval of the commission.

The very principles of the co-operative movement, as enshrined in the principles promulgated by the Rochdale Pioneers nearly a hundred and fifty years ago in Manchester, United Kingdom and the principles which have been adopted universally by the International Co-operative Alliance which is composed of more than 100,000,000 individual members from all over the world is now being sullied and brutalised in Malaysia with currents bordering on ‘political’ bureaucracy.

Finally, the High Court released a fair copy of the judgment and the solicitors had filed their documentation to the Court of Appeal. The matter had come up on four (4) different occasions and is still in limbo, with continued adjournment.

The provisions in the Act, the signature-crazy illegal ‘Garis Panduan’ and the government gazettes, some of which have lapsed, strikes at the very heart of democracy and human rights and there is a foreboding that the cooperative movement will be fully politicised and the funds of the cooperatives put to abuse by vested interests and their cronies. Many members of cooperatives have resigned from their societies out of disgust.

The people’s movement of 92 years is in limbo.

THURAISINGHAM SHAN is a co-operative and management consultant.