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  • February 14, 2025
Bill to give authorities the power to appoint interim directors for cooperative societies

Bill to give authorities the power to appoint interim directors for cooperative societies

A bill passed by the Tamil Nadu Legislative Assembly on Tuesday seeks to suspend the board of directors of cooperative societies indulging in financial irregularities, fraud and embezzlement and further empower the authorities to appoint an interim director.

However, AIADMK’s RB Udhayakumar alleged that the bill had an ‘ulterior motive’ and could be misused to arbitrarily disqualify efficient elected representatives on charges of embezzlement without valid evidence. Minister KR. Periakaruppan claimed that this was only to reduce the time taken to complete the procedure.

The Tamil Nadu Co-operative Societies Act, 1983, provides for the substitution of the board of directors of a co-operative society and the appointment of a manager for a period not exceeding six months to manage the affairs of the society.

The bill read: “In certain cases, immediately after a notice of replacement of the board is issued by the Registrar, the board having indulged in financial irregularities, fraud or embezzlement, manipulates the accounts or destroys the books of accounts with ulterior motives” .

The bill authorizes the registrar to suspend such board immediately upon the issuance of a notice of substitution and to appoint an interim administrator to manage the affairs of the registered association, until an order is issued. The House of Representatives adopted the bill after a vote.