Govt auctioning Oriental’s assets to compensate duped victims

Kathmandu, November 15

Thousands of victims of Oriental Cooperative hoping to recoup their money may be up for a huge disappointment as they are likely to receive only a negligible fraction of their investment.

While the government has formally initiated the process of compensating Oriental’s victims by announcing the auction of its identified assets, its total value is minuscule compared to the liability of nearly Rs 16.5 billion in the Oriental Cooperative scam.

Publishing a notice today, the Problematic Cooperatives Wealth Management Committee announced the auction of 27 land plots in seven districts that have been identified as assets of Oriental Cooperative. However, the total value of these plots is merely Rs 40 million, which is less than 0.25 per cent of the total calculated liability of Oriental Cooperative.

The committee had calculated the liability of the cooperative on the basis of 7,500 claims that it had received from the public (depositors), government and banks and financial institutions.

Moreover, the committee plans to rebate Oriental’s victims equally from the collected amount after liquidating the assets. “Rebating almost Rs 40 million to nearly 7,500 victims means nothing to the victims as they have lost millions of rupees. However, the law allows us to equally distribute the collected money among victims after liquidating the cooperative’s assets,” Yuba Raj Subedi, chairperson of PCW-MC, told THT.

A rough calculation of the available data means that each victim of Oriental Cooperative is likely to receive only around Rs 5,333.33.

“As we were very late in initiating the investigation into Oriental’s fraud, the cooperative had managed to transfer and/or sell majority of its assets elsewhere before we could take any action,” explained Subedi, adding that this has led to a huge mismatch in the value of identified assets and the total liability in the scam.

Moreover, the value of identified immovable assets of Oriental is extremely low as the plots are located in rural parts of the country, added Subedi.

As cooperative sector is regarded as the third important pillar of the economy, Subedi opined that an immediate intervention from the government to regulate possible frauds in the cooperative sector was a must.

While a number of other cooperatives have been identified as problematic, Oriental is the biggest defrauder, misusing billions of rupees parked by its customers for housing projects that were being developed by Oriental Builders and Developers and Kohinoor Hill Housing.

Sudheer Basnet, chairman of Oriental Cooperative, was remanded in police custody for months, before being released on the Supreme Court’s directive. Basnet was operating several companies, including housing projects.

Money was collected from the public on the promise of providing apartments under his housing projects.

Flats were allegedly sold in multi-storey buildings without acquiring necessary permission from the Department of Urban Development and Building Construction.

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