The PAS-linked Koperasi Al-Hilal Bhd or Kohilal is being investigated by the Cooperative Development Department (JPK) and the Securities Commission (SC) for alleged mismanagement.

Kohilal treasurer Mohd Kusrin Rahmad said investigations commenced following complaints by the cooperative's members pertaining to multi-million ringgit investment schemes introduced between 1996 and 1999.

"The investigations started in 2001. When I came in with the new board of directors in June 2002, (the investigators) requested to look at some documents and we gave our full cooperation and provided them with all the documents.

"I understand that statements from members of the previous board have been recorded by the authorities but until today we don't know the status of the investigation," he said during an interview at the Kohilal headquarters in Kuala Lumpur.

He said the current board members, who took over after the previous team lead by PAS deputy president Hassan Shukri resigned, are not being investigated as they knew nothing about the investment scheme.

Also present at the interview were Kohilal directors Razali Mohd Daud and Md Shukor Aziz.

Kusrin said the cooperative was aware that many members are dissatisfied with the management of the investment scheme but that nothing can be done until the authorities complete their investigation.

"The matter is still being raised at the cooperative's meetings and we know that it is being raised at various party meetings and conferences. We know a lot of members are unhappy, they claim there is mismanagement and some even allege misappropriation. But we cannot simply point fingers at anyone," he added.

Interjecting, Md Shukor said this is why it is hoped that the authorities will wrap up their probe as soon as possible.

"If the outcome of the investigations is available, then we would be able to take our next course of action. Until then we can't do anything but wait," he added.

No refund

Asked if it was possible for any dissatisfied member to seek a refund of the money invested, Kusrin said this was not possible as the money had been used to launch several unprofitable investment schemes.

Explaining the botched investment schemes, Md Shukor said the schemes were not directly managed by the cooperative but by its now defunct subsidiary Kohilal Holdings Sdn Bhd (KHSB) between 1996 and 1999.

"The Islamic investment schemes or mudharabah were introduced by KHSB. Since a subsidiary is not allowed to collect investments from cooperative members, the board of directors struck a joint venture with KHSB and subsequently invited members to invest through Kohilal.

"They (the then board members) ordered the fund to be transferred to KHSB to proceed with the investment," he said.

According to him, a total of RM46.5 million was involved. Of this RM8.9 million was invested in a ostrich farm, RM8.9 million was used to purchase Malaysian Airlines (MAS) shares, RM9 million and RM16.2 million was invested in the Indonesian agriculture sector and Perdana Technology Venture respectively.

"The remaining amount was invested in KHSB's 24 subsidiaries including Ummah Asset Management which was investigated by SC for unlawfully pooling money from cooperative members," said Md Shukor.

He said initially, the cooperative had made good progress as about 10-15 percent dividends were paid out to members every three months until the financial crisis hit Asean countries in 1997.

"After that, members begun to ask where are the profits, what happened to the investment... And so the problem started. People also began to question the decision-making process in making the investments," he added.

Asked if any studies had been done on the viability of the various investment projects taken on by KHSB, Md Shukor said he was in the dark about this - but also said he had found no documents to this effect.

A Kohilal insider revealed that no studies were carried out because KHSB was also managed by the same individuals on the Kohilal board.

"There is no check and balance because it is the same people. This is what made members angry. The management had completely ignored business ethics in a bid to make millions.

"They acted callously and did not think that some of us had withdrawn our life savings to invest in Kohilal. Now our money is all gone," he said.

Concede mistakes

Referring to Kohilal's 2003 Annual Report which was made available to malaysiakini , he said that members are aware that the current management is not at fault.

"Looking at the minutes of the meetings, members are aware that the previous management must do the honourable thing which is to own up to their mistake. But instead they just resigned and refused to admit their faults. This is not the kind of leaders we should respect," he added.

Meanwhile Kusrin, Md Shukor and Razali expressed their hope that all 19,000 members will help the current management improve the cooperative instead of dwelling on the past.

"Help us improve the quality or our products and in carrying out other business plans. We are also studying a five-year project to raise RM50 million by 2010 through various business activities that we have lined-up including a joint venture with Maktab Kerjasama Malaysia.

"We understand the members' predicaments. We know some have lost their savings but maybe if we could focus more on the future instead of the past, we would enjoy better benefits."