CO-OPERATIVE ACT (REVISED) 2007 - UNCONSTITUTIONAL

Unfair of gov't grab our hard-earned funds Che Hani Ismail Jan 8, 08 4:54pm Allow us to state that several provisions in the Acts establishing the Malaysian Cooperative Commission and amending the Cooperative Societies Act 1993 are contrary to Federal Constitution.Koperasi Keretapi Berhad (KKB) had on Wednesday filed a legal action in the Kuala Lumpur High Court to challenge several of the provisions in the Malaysia Cooperative Commission Act 2007 and the Cooperative Societies (Amendment) Act 2007 which came into force on Jan 1.KKB feels it is unreasonable for its capital, which has been built up over the years for the benefit of its members as a result of good management by the members of its board, to now be taken away and used by the government without adequate compensation. The requirement for an outside body to approve the members of the board is also an unreasonable restriction on the rights of the members of KKB to manage KKB.KKB has taken this step because we feel aggrieved by several of the provisions which unreasonably restrict the following:- the fundamental liberty of members of KKB to associate under Article 10 of the Federal Constitution- the fundamental liberty of KKB not to be deprived of its property for the use of the government without adequate compensation in accordance with Article 13 of the Federal Constitution- the fundamental liberty of the officers of KKB not to be subjected to arbitrary arrest under Article 5 of the Federal ConstitutionKoperasi Keretapi Berhad is one of the earliest cooperative societies established in Malaysia. In 1923, it was formed for the benefit of employees of Malayan Railways with the name 'Railway Cooperative Thrift and Loan Society Limited' with only 98 members. As of Dec 31, 2006, the cooperative has a subscription capital of RM4,342,257.99 and fixed and current assets amounting to RM4,674,199.73 and reserve capitals of RM1,092,000 whilst its current liabilities are only RM282,185.88. Section 43 (1) of the Malaysian Cooperative Societies Commission Act 2007 (the Act) requires that all cooperative societies shall deposit their funds not immediately needed for operations or investments into the Cooperative Deposit Account while Section 42(2) of the Act requires cooperative societies to pay a percentage of their share capital, subscription capital and assets to the Central Liquidity Fund without providing for adequate compensation for the compulsory acquisition or use of the funds. Meanwhile, Section 43 (2) of the Cooperative Societies Act 1993 (as amended by the Cooperative Societies Amendment Act 2007) requires that a cooperative society shall, prior to the appointment or re-appointment of any person as a member of the board of a cooperative society, seek verification from the Malaysia Cooperative Societies Commission on whether such person satisfies the fit and proper person criteria as may be specified by the Malaysia Cooperative Societies Commission.This is inconsistent with the citizens' fundamental right of freedom of association guaranteed by Article 10 (1) of the Federal Constitution, and not excepted by Article 10 (2), 10 (3) or 10 (4) of the Federal Constitution. KKB has taken legal action to safeguard the interests of our members and their savings. We hope the government will review their decision to enforce the Act or will take the necessary steps to repeal or amend the Act so it is consistent with the requirements of the Federal Constitution.