Vacoas Popular Multi-Purpose Co-operative Society Limited Status of the society Madam Speaker, 1.0 The Vacoas Popular Multipurpose Cooperative Society Ltd is a 2.0 3.0 body corporate managed by a Board in accordance with the Cooperatives Act. | am therefore under no obligation to provide information on the internal administration and operations of the society. However, this PNQ gives me the opportunity to bring clarification to certain unfounded, baseless and mudslinging allegations levelled by some unscrupulous persons with the apparent objective of tarnishing my reputation as well as that of the Registrar of Cooperatives . This society started its activities in 1977 and over the years, it has grown successfully to reach a membership of around 5500. The society was previously managed by a Board of Directors elected at its Annual General Meeting. a5.0 6.0 6.0 | also wish to inform the House that the Financial Statements of the society were audited by External Licensed Auditors appointed by the General Assembly. However, in 2013 an Inquiry commissioned by the Registrar of Cooperative Societies revealed serious malpractices and shortcomings. The Inquiry Report revealed inter-alia: ¢ loans which were issued without providing sufficient collaterals as security in favour of the society insolvency problems ¢ huge amounts of non-performing loans granted to members At that time, the society was already insolvent and the members who were kept in the dark, did not take any corrective actions. The then elected Board continued to approve the loans.7.0 8.0 9.0 Madam Speaker, It is with this background that in December 2014 the society was put under strict control, under section (73) of the Co-operatives Act 2005, to ensure that all transactions effected by the society are vetted by officers of the Co-operatives Division, in order to prevent loss or misuse of society’s funds The Registrar of Cooperatives also decided in accordance with the provisions of the Co-operatives Act, to appoint a “Caretaker” Board in January 2015 to manage the affairs of the society. The “Caretaker” Board was entrusted with the responsibility to salvage the co-operative society, through appropriate remedial actions. The Board had to address issues pertaining to deposits by members, payment of interests, refund of share capital, loan recovery, cash flow and liq ity problems, toxic loans and land/property development, among others. Madam Speaker, | also wish to inform the House that the “Caretaker” Board in early 2015, appointed Ernst & Young Accountancy Firm as Management Company at a monthly fee of Rs230,000 inclusive11.0 of VAT to assist the Board. However, with a view to curtailing expenses the contract of Ernst & Young was terminated in July 2015. SB Proconsult, represented by Mr. G. S. was in lieu, appointed at a fee of Rs172,500 inclusive of VAT. At the initial stage we did not receive any adverse report on the operations of the society until August/September 2017 when some members of the society contacted me with regard to the performance and behaviour of the then Manager. | was also made aware that as from that moment, the Board of Directors had quasi unanimous negative views on the performance of SB Proconsult . In fact at this specific stage, a large majority of Directors of the society did not share the opinion of the ex-Chairperson12.0 13.0 Madam Speaker, | am informed that initially there were two offers regarding the proposed Sale of Land at Flic-en-Flac. On 08 September 2017, after having considered both offers, the Board of Directors under the Chairmanship of Mr Jhugroo, unanimously recommended that the offer of C... Ltd be submitted to the General Assembly for approval. In spite of the Board decision of 08 September 2017, the then Chairman, Mr L. Jhugroo on his own ultra vires and on the back of the Board continued to negotiate with F... Ltd that is the author of the rejected offer. Furthermore | wish to highlight that in a letter of 07 November 2017, the ex-Chairperson requested me for the replacement of three,Direct ors. This would have enabled him to have a better leverage on the decision making process of the society. | wish to inform that the appointment of Caretaker Board is vested in the Registrar of Cooperative Societies as per Section 47 sub section (10) of the Cooperatives Act .14.0 Madam Speaker, At this point | wish to inform the House that at a Board Meeting held on 06 December 2017 a decision was taken by a majority of seven Board Directors to terminate the contract of SB Proconsult Ltd and the ex-Chairperson was asked to send a letter to the company accordingly. The letter was never issued and moreso, on 20 December 2017, SB Proconsult vacated office on its own. | was also informed that the Board was renewed on 19 December 2017 with the same nine Directors and with Mr. Jhugroo still as Chairperson. On the 21 December 2017, the Registrar convened all the Directors to hand over their letter of appointment. However, on that day the ex-Chairperson did not mention that on the eve, he had sworn an affidavit in the Supreme Court where he had made a number of unfounded and self -contradictory allegations. We are only aware of this affidavit from leaks reported in the press.Madam Speaker, 14.0 15.0 In the light of the above, the Registrar of the Cooperative Societies reconstituted the Board . Madam Speaker, After having taken cognizance of the chronology of events and within a time span of four months starting with 08 September 2017 when the decision was taken in relation to the proposed sale of land at Flic-en-Flac up to end of 2017, the question of interference has never been raised. | leave it for the House to draw its conclusion. On 12 January 2018 the Board of Directors published a notice in the Press regarding inter-alia unfounded allegations made by the ex-Chairperson In the said notice it was pointed out amongst others the following: In line with Section 47 of the Cooperatives Act, the Caretaker Board had resolved (as evidenced by several Minutes of Proceedings) to call for a General Meeting of Members, within the next few weeks in order to:« make a presentation of the various options available regarding the Flic-en-Flac land, * present to Members the contents of the draft agreements submitted by the prospective buyers,(including the rejected offer) with details of their shareholders and directors, e obtain the General Meetings’s consent (or refusal) regarding the best option as approved by the Board. 16.0 It is therefore clear that th€ contrary to allegations, no party, not even a Minister except the General Assembly can claim to have the authority to dispose the assets of the society. Madam Speaker, 17.0 In relation to the Vacoas Popular Multi Purpose Cooperative Society, there is no evidence nor valid suspicion of corruption nor attempted corruption in relation to any public official, and therefore there are no grounds for referring any such matter to the ICAC.418.0 Some of the allegations of interference circulated in public emanate from the former Chairman Mr Sunil Jhugroo in various press conferences and social media videos, and none of them disclose any valid evidence of any act calling for further action from my Ministry. Indeed the above mentioned notice from the caretaker board dated 10 January 2018 stated that said allegations reported in the press are ‘unsupported, frivolous and devoid of legal basis’ and had reserved the right to make monetary claims from the author or authors of said allegations. Indeed the Cooperative society acting through the Board was successful in obtaining a court order against the authors of these allegations. It stands to reason that if the authors of the allegations had demonstrable evidence of what they pretend, the onus was on them from the start to have reported it to relevant authorities .21.0 Finally, Madam Speaker, | wish to remind the House that the so- called interference is a smokescreen, a diversionary tactic to draw attention away from the heart of the problem at the Vacoas Cooperative. The proposed sale of land is merely a means, not an end. The true scandal lies elsewhere. Need I remind this House that over THREE HUNDRED MILLION RUPEES were embezzled by a former Board and management of the Vacoas Cooperative until 2014, that is well before my tenure as Minister for Cooperatives. | inherited this disastrous situation that was allowed to fester until 2014. 10