The Shah Alam High Court today postponed to Sept 15 the hearing to declare invalid three provisions of the Co-operative Commission Act 2007 and Co-operative Societies (Amendment) Act 2007.

High Court judge Hinshawati Shariff was on medical leave.

The Co-operative Commission and National Co-operative Organisation (Angkasa) had requested for more time to reply to the affidavit filed by the Co-operative Union of Malaysia (CUM) and Midlands Co-operative Union (MCU) yesterday.

In their originating summons in chambers filed on Jan 6, 2009 at the High Court, they also disputed the validity of the appointment of Angkasa as representing all cooperatives.

The Finance Ministry, (then) Ministry of Entrepreneur and Co-operative Development, Co-operatives Commission and Angkasa have been named as defendants.

Malaysiakini understands that many co-operatives were not consulted when the act was amended in parliament on July19,2007.

Angkasa, the only body that gave its consent, stood on shaky grounds as the co-operatives claimed it does not represent the views of all co-operatives.

On April 23, various co-operative societies received a circular from the commission asking them to increase their contribution of 15 percent to 25 percent to a Statutory Reserve Fund.

The increased allocation is to come from their profits or annual income.

They were told to change the money to cash and keep it in fixed deposits in their own accounts.

In other words, the commission wants the moneys in cash and not in assets for quick liquidity.

Co-operatives consultant Shun Thuraisingham told Malaysiakini that the circular amounts to subjudice and contempt of court as the matter has yet to be decided by the courts.

"This is a pre-emptive move by the commission as the matter is still under the purview of the high court," he said.

Contentious sections

The two bodies are contesting the following provisions, and seeking a declaration that these contravene the federal constitution:

Cooperative Societies Commission Act 2007

A. Section 42 - allows the commission to order any co-operative society to contribute to the Central Liquidity Fund a percentage of its share capital, subscription capital or assets as determined by the commission

B. Section 43 - all co-operative societies must deposit into the Co-operative Deposit Account all their funds "not immediately needed for operations or investment" without provision for compensation

C. Section 54 - every offence, punishable under the act, shall be a seizable offence.

The coops are also seeking to repeal Section 36 of the Cooperative Societies (Amendment) Act 2007 which they claim to be ultra-vires Article 10 of the Federal Constitution that allows "all citizens the right to form associations."

They contend that Section 36 violates this right by curtailing the right of ordinary citizens from forming an association by specifying certain criteria that must be met first.