The Entrepreneur and Co-operative Development Ministry has taken over the administration and management of the beleaguered Koperasi Al-Hilal (Kohilal), a co-operative society closely linked to PAS.

The Co-operative Development Department dissolved Kohilal's board of directors and appointed (the department's) Federal Territory deputy director Saadah Sirat to oversee day-to-day operations. This was carried out under Section 69 of the Co-operative Society Act 1993.

Kohilal's former executive director Mohd Shukor Aziz told malaysiakini that the takeover was announced by the department's deputy director-general Mohd Yusof Samsudin during a two-hour meeting at Kohilal's office at Jalan Pahang, Kuala Lumpur on Aug 11.

He said the move was made following unresolved disputes within the board involving the reinstatement of Kohilal chairperson Ahmad Radzi Abdullah and secretary Zakaria Abdul Aziz who had successfully overcome a vote of no-confidence against them last year.

"None of the board members wanted to meet one another half-way. This was a major setback to the running of the co-operative as we failed to organise even one board meeting. This is why the department has to take over," said Shukor.

"We were told that the takeover could be in force up to two years. But we were assured that it will end once a new board is elected by the members ... I am confident that a new board will be elected at the next annual general meeting in December."

'Don't worry'

Shukor said he was aware that some Kohilal members - who are still upset over the co-operative society's botched investments that led to a RM46.5 million loss - may find the situation alarming.

"I assure all members that their interests and investments will no be affected by the ministry's takeover. Whatever funds we have will remain where they are. Members need not worry. Kohilal workers can also go about their jobs as usual. Their salaries will be paid, I am sure of this."

He said that, although the takeover was not linked to the bad investments, he believed that the problem would soon be dealt with now that the government was in the picture.

"I believe the department will shed some light on the outcome of its investigations. It may be announced at the next general meeting. The findings will help us to improve members' confidence in Kohilal," said Shukor.

PAS economic bureau chief Dr Rosly Yaakob, also the party's central working committee member, said he did not view the latest development as a setback for Kohilal.

"Well, the takeover shows that something is wrong and the department has decided to take over to set things right. If the department wants to help Kohilal overcome its financial problems, then we support the move."

An 'embarrassment'

Rosly also noted that members' grouses on the co-operative's investment blunders have not been resolved and that he would bring up the matter at the central committee meeting next month.

"I am proposing that we conduct an in-depth study on Kohilal's financial status to find out what went wrong. From there, we will come up with recommendations on how to improve it and bring profits to investors," he said.

"I am sure that members will accept the losses if these were due to the volatile economic conditions then. But we won't tolerate losses that occurred due to bad management or misappropriation."

A PAS politician from Kuala Lumpur who declined to be identified, said he the latest development is an embarrassment to the party as it shows lack of credibility on the part of PAS leaders in handling economic matters.

"It shows that we can't even take care of a co-operative society. How can we then handle the nation's economy? How will we be perceived by the people? I hope the leaders will take steps to address and overcome the problem."

He said PAS leaders should be bold enough to accept Rosly's proposal for an in-depth study into Kohilal's bungled investments.

"I am sure Dr Rosly is capable in producing a balanced report. Let's be fair about this. Sweeping problems under the carpet - as we have done in the past - will not help the party anymore."