Bunye Betfu ordered to hold elective special meet
MANZINI – Bunye Betfu Buhle Betfu Savings and Credit Cooperative Society has been ordered to hold an elective Special General Meeting not later than March 2, 2024.
This order came from the office of the Commissioner of Cooperatives, Russell Nxumalo. The commissioner of cooperatives issued this order subsequent to a long rigmarole between his office and that of the Board of directors.
Bunye Betfu Buhle Betfu is a Savings and Credit Co-operative Society (SACCO). The SACCO, according to its website, draws its membership from employees within the public sector and currently has a membership of about 5 784, which is about 14 per cent of the total population of employed civil servants.
Leading to the directive, the Supervisory Committee of the SACCO, chaired by Lawrence Khumalo, wrote to the chairperson of Bunye Betfu and copied the commissioner of cooperatives.
Acknowledged
The letter, which Khumalo has acknowledged, had the subject being ‘Urgent Attention Needed: Irregularities in Bunye Butfu Cooperative Board and budget preparation’.
Khumalo said: “I am writing to bring to your immediate attention several concerning issues pertaining to the current Bunye Betfu Cooperative Board and its operations. As the chairperson of the Supervisory Committee, I am entrusted with the responsibility of ensuring the organisation’s adherence to its rules and regulations, i.e (the by-laws and relevant legislation) and I believe the current situation requires prompt rectification.”
Firstly, he said, the current Board’s term of office had expired. Khumalo said as per the resolution passed during the annual general meeting (AGM) held in August 2023, elections for a new Board should have been conducted on or before the end of October 2023.
The supervisory chairperson said as of February 2024, this remained unfulfilled and as such, it was a clear violation of the AGM’s directive and potentially placing the Board in an illegal position.
Khumalo also informed the Board that the delay in holding elections had resulted in a critical impasse regarding the cooperative’s budget. He said with the current Board’s legitimacy in question, it was impossible for them to prepare and present a valid budget to the general membership before the end of February 2024, as mandated. This, he said, posed a significant threat to the organisation’s financial planning and overall stability.
“Therefore, I urge you to take immediate action to address these concerning issues: Acknowledge the Board’s expired term and its resulting irregular status. Recognise the gravity of the situation and its potential legal ramifications,” Khumalo said.
He further advised the Board to initiate the electoral process promptly, adhering to the established regulations and timelines. He also advised the Board to abstain from presenting a budget under the current Board’s authority. Khumalo said the Board should wait for the newly-elected Board to fulfil this crucial responsibility within the proper time frame.
Urgency
He emphasised the urgency of the matter and also appreciated the continued operation of the Board beyond its lawful term and the postponement of the budget presentation; which he said were to the cooperative’s well-being.
Khumalo said taking the necessary steps to rectify these irregularities was paramount to restoring confidence, upholding legality and ensuring the organisation’s smooth financial planning.
This communication was not responded to by the Board, but instead, the Commissioner
of cooperatives addressed the issues. Nxumalo on February 13, 2024, acknowledged receipt of the letter from the supervisory committee dated February 2, 2024 and not referenced, wherein a number of critical issues were raised concerning irregularities in holding the Special General Meeting (SGM) for budget and Board term of office.
Nxumalo said: “I note with concern that theAGM was held inAugust 2023, wherein you were supposed to have elections and a waiver was given until the end of October 2023. Since then, there has been no correspondence from your office with regard to the non-compliance in holding elections as per Section 50 of the Cooperative Societies Act, 2003.”
The commissioner of Cooperatives advised the Board to note the provisions of Section 112 of the same Act ,which related to offences wherein, ‘Any person, who generally contravenes any provisions the Cooperative Societies Act, 2003, commits an offence and shall be liable on conviction to a fine not exceeding E25 000 or to imprisonment for a term not exceeding five years or to both’.
Convene
Nxumalo’s office directed the Board to convene and hold the elective Special General Meeting (SGM) within 14 days of the date of this letter. Furthermore, he informed the Board to also convene a handover meeting within 21 days, from February 13, 2024.
“The new Board will be required to convene an SGM within 30 days of the date of this letter. Failure to comply with this directive will leave the office of the commissioner with no alternative but to invoke Section 72(4) of the Cooperative Societies Act, 2003 as amended. The office of the Commissioner has the responsibility of ensuring a conducive environment for growth and sustainability of all registered cooperatives,” Nxumalo said.
However, seven days after issuing the first letter, Nxumalo on Tuesday wrote to the Board again. This was subsequent to the meeting held between his office, Financial Services Regulatory Authority (FSRA), and the Board yesterday at the Ministry of Commerce, Industry and Trade.
He said the Cooperative Development Department, in collaboration with the FSRA, has a mandate to promote, register, develop, regulate, licence and monitor all types of cooperatives and also, they have a duty to provide and create a conducive social, economic and legal environment for the sustainable development of cooperatives.
Nxumalo said: “It must be noted that your office failed to comply with a resolution of the general membership wherein you were supposed to hold an elective general meeting not later than October 31, 2023. Your office violated Section 47 (1) of the Co-operative Societies Act, 2003 as amended.
Financial
“Further, kindly note that co-operative societies are expected to hold their Annual General Meetings within four months after the end of their financial year as prescribed in the National Co-operatives Development Guidelines and Directives No. 8 (a). Therefore, you are directed to hold an elective Special General Meeting not later than March 2, 2024.”
He directed the office of the chairperson of the SACCO to make an official handover within 14 days after the date of the elective SGM. Nxumalo also said the incoming Board members would be required to submit to FSRA all necessary documents for vetting within five days from the date of the elective meeting.
Also, he said the incoming Board after passing the fit and proper tests would be required to call an SGM for a budget presentation not later than March 23, 2024.