Reports that two co-operatives are suing the government (and a few others ) over the Malaysian Co-operative Societies Commission Act 2007, has caused anxiety and concern amongst co-operative members.

According to news reports, the co-operatives are unhappy with Section 42 of the Act, which calls for the setting up of the Central Liquidity Fund and Section 43 which involves the setting up of the Cooperative Deposit Account.

Under the Central Liquidity Fund, the Malaysian Co-operative Commission (MCC) may require any co-operative to contribute a certain sum to the fund.

Under the Co-operative Deposit Account, all co-operative societies shall deposit their funds not immediately needed for operations or investments into the Co-operative Deposit Account.

The co-operative movement is a noble one. However, many of our local co-operatives do not operate in the spirit in which co-operatives are founded - which is mutual help to improve the social and economic well-being of their members.

Many times co-operatives end up benefitting only the office bearers. There have been cases of missing funds, abuse of power and mismanagement by the directors of co-operatives.

We have also received many complaints from members who lost their money when their co-operatives became insolvent.

There is no doubt that there is a need to have greater control over the activities of co-operatives to ensure that their funds are not abused.

Therefore, the two co-operatives must explain how members can be better off without sections 42 and 43.

On the other hand, the MCC should explain how sections 42 and 43 will benefit members.

Ordinary co-operative members only want to know how their interest will be protected.

The writer is president, Consumers Association of Penang.