The Hindu Business Line : Compulsory appointment of co secretaries in co-ops sought

THE Institute of Company Secretaries of India (ICSI) has suggested for compulsory appointment of company secretaries as compliance officer in cooperative societies.

Identifying the cooperative sector as an area where company secretaries in employment as well as in practice can provide value-added services, the institute has suggested that a provision should be made in law for the same.

Mandatory appointment ofa whole time company secretary in cooperative societies with turnover of say Rs 5 crore as a compliance officer under the Cooperative Societies Act, would ensure proper compliance of various regulations applicable to a co-operative society, the ICSI sources said.

Similarly, it has also suggested that a provision should be made for compliance audit of small cooperative societies by a practising company secretary to ensure that the society has complied with all regulations applicable to it. In fact, it proposes to make presentations before appropriate authorities on the same, sources told Business Line.

"We have witnessed in the recent past major scams involving cooperative societies. This creates an environment of distrust in such system amongst the general public and investors," they pointed out.

Commenting on the root cause of this problem, sources said the existing system of ensuring compliances and taking care of all stakeholders is not adequate. "There is no provision in the law governing the societies for appointment of an independent professional like a company secretary to ensure proper compliances of laws and procedures applicable to cooperative societies," he said.

Regarding the role of a compliance officer in cooperative societies, ICSI sources stated, the professionals can help in formation and registration of such societies, and conducting of meetings of management committee and members. The compliance officer can also help in maintenance of minutes, statutory registers, issue of share capital, and distribution of dividend among others.

On the benefits of compliance audit, sources stated, it would provide for a mechanism for self-regulation by cooperative societies and assure the regulators as well as generate confidence amongst the shareholders and other stakeholders in such a structure.

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