GENERAL Santos City — The Cooperative Development Authority (CDA) is set to issue a "show cause order" against a credit cooperative based in Sarangani province over questions on its investment operations.
Aminoden Elias, CDA-Soccsksargen regional director, said Thursday they are currently processing the issuance of the order to Alabel Maasim Credit Cooperative (Alamcco) for violating its own Articles of Cooperation and Bylaws (ACBL) and Republic Act 9520 or the Philippine Cooperative Code.
He said the move was in line with the ongoing investigation by the CDA central office into Alamcco's solicitation and acceptance of deposits or investments from non-members at a monthly interest rate of 35 percent.
"This is to let them (Alamcco officials) explain, as a matter of due process, why (the cooperative) should not be dissolved," Elias said in an interview with a local television station.
The Securities and Exchange Commission (SEC) had issued an advisory, warning the public against Alamcco's investment operations at "a promised interest rate that is too high to sustain their claims that every member will receive as long as the cooperative operates".
SEC said the cooperative is "not allowed to offer, solicit, sell or distribute any investment/securities from the public as the same requires a secondary license for such activity".
Agents from the National Bureau of Investigation "visited" last week the offices of Alamcco here, in Koronadal City and Alabel, Sarangani in line with the crackdown ordered by President Rodrigo Duterte against the rampant "pyramiding" investment activities.
Citing their investigation, Elias said Alamcco violated the provisions of its ACBL for soliciting and accepting investments in the form of deposits from non-members.
He said the cooperative, which was registered in December 2018, was only allowed to recruit members from this city and Sarangani province based on its specified area of operations.
But Alamcco has opened various offices in Soccsksargen that it uses to recruit members for its investment scheme, he said.
Under Alamcco's ACBL, he said its recruits should undergo pre-membership education seminars before they are admitted as regular members.
Elias said the new members should subscribe by paying a minimum required shared capital based on the authorized capital of the cooperative.
As a credit cooperative, he said it is only allowed to promote and undertake savings and credit services to its regular members.
He said Alamcco officers were aware of such provisions since they were the ones who crafted its ACBL and these were discussed to them by the agency during the pre-registration seminar.
The official said the cooperative was previously informed of such violation through an advisory issued by its central office last May 31 and the cease and desist order (CDO) dated June 7.
"The CDO mainly stops Alamcco from receiving deposits and investments from non-members but its other authorized activities may still continue," Elias said.
Lawyer Umar Genita, Alamcco legal counsel, said the cooperative is currently complying with the CDO issued by CDA.
He said their officers have also considered lowering the interest rate of its investment scheme to 20 percent to ensure that it will be sustainable.
In the wake of the controversy, some of members of the cooperative have already signified to withdraw their deposits but the processing remains pending.
"We are not running away from our obligations. We will comply with what is agreed and return whatever amount deposited by the members," Genita assured. (PNA)