Deepak Konhalikar
Dear Naik Sir,
I want information/suggestion regarding action against fraud in non aided credit cooperative society.
Following is the case – My uncle is director in credit cooperative society, total body of 11 directors.
General Manager & some employee team committed a fraud under head cash in hand & loan cases (Not lesser amount). As per all directors they really don’t know the fraud he has been doing. General manager orally accepted he has done all this act, with no past idea to board of directors, also he has managed auditor.
Following questions in mind/ need suggestions –
1) Out of 11 directors my uncle & 1 director ready to suspend that person as per bye laws & file a criminal action, is it ok or need more directors to take action as per Bye laws ?
2) May i know how my uncle is safe in this case as a director ?
3) If any member give a complaint against society with AR for investigation audit, then in how many days AR will take a action & what is the impact of complaint on society & on directors ?
4) In case if that GM is ready to pay that fraud money, whether to get it from him in writing (In detail) & how it will impact directors in case of future complaint by member?
I C Naik
As the cooperative society does not receive any State aid, the issue needs to be confronted by the members in general meeting being a private affair. The aggrieved party is the General Body of members.
The board is accountable for all deeds of the Society to the membership. Members in the General Body Meeting can resolve to file a criminal complaint against the Board or if majority has trust in the Board and take the story you have narrated at face value, the meeting may resolve to get the records examined by another auditor society’s auditor failed to detect the fraud.
GM’s confession may be vetted by such investigating auditor and if found in order, the the general body meeting may recover the defrauded amount, reprimand the GM and let him continue, that is the exceptional human approach.
The board may take a decision and recommend to the general body meeting and if they really enjoy the goodwill of the general body meeting this peaceful solution may go through.
Since the perpetrator of fraud are willing to confess and take corrective steps it may not become necessary to file.