Domestic Trade, Cooperative And Consumerism Minister Ismail Sabri Yaakob today said that the Co-operative Commission Act 2007 and the Co-operatives Commission is necessary to protect the movement.

Under the Co-operative Commission Act 2007, cooperatives have to agree to the following rules:

(1) Higher contribution to the statutory fund from 15 per cent to 25 per cent.

(2) Imposed restrictions on the appointment of board members.

(3) Contribution of share capital, subscription capital or assets to the Central Liquidity Fund.

(4) Every offence punishable under the Act, is a seizable offence.

cooperative story 230609 ismail saberi The minister said that "there are times that the government would have to impose restrictions and regulations".

"This is to protect the interest of all and not just a few individuals.

"We do not intend to deny co-operatives their right. The 25 per cent contribution brings returns just like the fixed deposit.

"I hope that the commission will explain and it'll be for the better.

"We will review it every year and if there is a need to revise it, we will," he said during a dialogue session with the co-operatives at the Holiday Villa, Subang Jaya today.

Co-operatives Commission chairman Mangsor Saad, one of the panel member, defended the 10 per cent increase in contribution, saying that the funds are accessible to co-operatives.

Gov't prepared to review 25 percent contribution

"Profits set aside is for emergency use. It will incur no losses as the assets are controlled by the co-operatives. This is to protect the co-operatives in case of liquidity problems.

"We have set a certain ratio (25 percent) and if the allotted ratio burdens the co-operatives, then we will review it," he explained.

The commission came under fire recently for increasing the Statutory Fund contribution from 15 percent to 25 percent.

cooperative story 180609 mohinder singh 01 President of the Cooperatives Union of Malaysia, Mohinder Singh, remarked that increased contribution to the Statutory Fund from 15 percent to 25 percent is unreasonable and its haphazard implementation causes uncertainty.

"This represents a big chunk of our profits. It would affect dividends we can declare to members and also cash available for our business activities.

"We want more clarification - will the cash be tied up? Will it bear returns and will it be cumbersome to remove funds? Where to deposit the funds?” he said.

Former president of the Jaffnese Cooperatives Society, Thillai Nathan, echoed Mohinder's concerns on the higher contribution to the Statutory Fund and questioned the way it was implemented.

"It’s a case of taking Peter's money to pay Paul. They're using funds of successful cooperatives, saved by members over the years.”

thuraisingham shun cooperative story 120609 Cooperative consultant Thuraisingham Shun said that the dialogue is a mundane affair that failed to address pertinent problems faced by the movement.

"It's a typical meet the public affair. Only six people were able to ask questions. More time should be given. Furthermore the minister is new."

Later, Co-operative Union of Malaysia vice-chairman Ahmad Ghazi Abdul Hamid and Thuraisingham submitted a memorandum on the shortcomings of cooperatives to the minister.