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Kathmandu, Nov 6: The government is preparing to go tough on cooperative fraud, with plans to seize and sell properties not only of those directly involved but also those registered under family members or separated relatives.

Acting on Prime Minister Sushila Karki’s directive, the Ministry of Land Management, Cooperatives and Poverty Alleviation is drafting an ordinance to enable stronger legal action. The move follows a series of consultations among the ministry, the National Cooperative Authority, the Department of Cooperatives, and the Problematic Cooperative Management Committee.

Officials involved in the discussions say the existing law lacks teeth to recover funds or seize assets from fraudsters who have fled or hidden wealth under others’ names. “We’ve already submitted written recommendations to the ministry,” said a committee member. “Without a new ordinance, recovering defrauded savings is nearly impossible.”

The proposed ordinance would empower authorities to trace and confiscate declared or undeclared assets of cooperative operators. It also calls for deploying a Central Investigation Department unit inside the committee office to streamline asset-tracing efforts.

Currently, if a cooperative’s property is under bank mortgage or third-party claim, the committee has no authority to liquidate it. The draft ordinance proposes cooperation between banks, courts, and the committee to remove these bottlenecks.

Officials say the law must also cover those who have formally separated from fraudsters but benefited from misused cooperative funds, arguing that “such separation cannot exempt them from responsibility.”

The ministry has been holding meetings with cooperative campaigners and regulators to finalize the ordinance. It sees this as the only legal path to recover billions lost to mismanagement and fraud.

So far, 23 cooperatives have been officially declared problematic. Their assets are being sold gradually to repay depositors, but thousands of other operators accused of misusing savings remain at large, many reportedly abroad.

Officials say once enacted, the ordinance will allow the state to seize and auction hidden assets, repatriate absconding operators, and begin reimbursing depositors — marking the toughest crackdown yet on Nepal’s troubled cooperative sector.

People’s News Monitoring Service