A can of worms in the coop sector
The Cooperative Development Authority (CDA) should brace itself for a major shake up, this after a federation and the apex body of cooperatives raised a howl over the regulatory body’s perceived careful and delicate handling of the case filed against NutriWealth Multi-Purpose Cooperative (NWM-PC).
The issue stemmed from a complaint lodged by a member in October 2017 after she was prevented her from withdrawing her deposits with the coop.
The member then sought the help of the apex body Philippine Cooperative Center (PCC) which subsequently passed on the complaint to the Federation of People’s Sustainable Development Cooperative (FPSDC)of which Nutri Wealth (NW) is a member.
News about NW’s events appear in my FB’s online news feed and that’s how I knew it gave presentations to some wealthy coops here last year. The promise of hefty returns hyped by “double your money in five years” is said to have lured many people to put their money in NW’s “financial literacy program”.
Accepting direct deposits is not indicated in NW’s Articles of Cooperation and By-Laws, thus the particular business operation is illegal. Actually NW has been conducting membership campaigns among overseas Filipino workers (OFWs) through on-site events in Hong Kong and Dubai in violation of the law which limits its operations only in Luzon.
Nutri Wealth Cooperative is based in Quezon City. In 2010 it started as a Producers’ Cooperative selling herbal medicine products. They would outsource farm products like malunggay, turmeric, lagundi, etc., repack and sell them as organic commodities. But unlike other coops who recruit members regardless of their gender, color or creed, NW initially limited its membership to NutriPhysics Wellness Association. This type of membership is associational. Interestingly, the Securities and Exchange Commission (SEC) had suspended NutriPhysics Wellness Association in September 2016 after it failed to submit reports of its operations for five years.
After adding credit to its purpose in 2014, NW amended to become a multi-purpose cooperative but instead of putting up a loan window, the cooperative opened a coffee shop, water stations, a resort, bakery and a farm — businesses that are not indicated in its Articles of Cooperation and By-laws.
The center of its business operations is the “Financial Literacy” program that promises to double the member’s money in five years. They are also encouraged to bring in new members such that to date the coop is said to have 12,000 members in its roster, each depositing P1,000 a month. Based on this assumption, the FPSDC which looked into NW’s operations said the collective deposits could reach P12 million a month. I think a state audit is in order here.
FPSDC tried to get NW’s side on the matter but the coop responded by severing its ties with the federation. I guess federation officials were relieved to let go of the controversial coop but they felt the truth about NW’s operations had to be dealt with by no less than the regulatory body because what they unearthed was a virtual can of worms.
On the basis of FPSDC’s representation, CDA’s Manila Extension Office launched an investigation in November 2017. After more than three months, the MEO led by Director Nonie Hernandez issued a series of cease and desist orders in February 19, 2018. The CDOs did not see the light of day until last week when Ms. Rowena Plantilla, CEO of FPSDC posted comments about get rich schemes happening in the coop movement. The shout out elicited a flurry of online demands for CDA to disclose its findings on its probe of NW.
For lack of space, may I refer you to the link in the CDA website which published the aforesaid CDOs last February 23, 2018.
http://www.cda.gov.ph/resources/updates/news/865-advisory-cease-and-desist-orders-for-nutriwealth-mpcIn my view, the CDOs have the effect of putting NW out of business but it first it has to reimburse they money they owe depositors who want their deposits back.
I was aghast to hear NW trying to discredit the agency by challenging “some of the findings” of the MEO Regional Director. On the other hand, the CDOs look to me like a leg room for NW to retool its business operations and forestall a “bank run” of sorts because that is bound to happen if members get wind of this development.
What I find highly objectionable are the number of awards reaped by the coop since 2014. The “Gawad Parangal,” known as the Oscars of the cooperative sector entails thorough examination and validation by CDA co-op specialists. How did they arrive at the conclusion that NW have become a model for good governance and ethical values of honesty, fairness and caring for others from 2014 to 2017?
I can understand why the sector tries to calibrate its next course of action because it doesn’t want to tangle with the regulators who can make life difficult for some of them and so I hope the Ombudsman will take cognizance of this case motu propio.
Subscribe to our regional newsletter
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of Cebudailynews. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.