The Hon. Wasantha Samarasinghe - Minister of Trade, Commerce, Food Security and Cooperative Development

¶ 01 Mr. Speaker, under the Co-operative Societies law, registration authority lies with Provincial Councils. That power appears to have been misused. There are co-operatives registered under Provincial Commissioners and also under the Department of the Registrar of Co-operative Societies at central level. At present, interim Boards continue; questions arise on how elections were held and on member enrolment—associate members have been enrolled only recently. These entities operate effectively as banks, with 9 branches in Anuradhapura and 6 in Polonnaruwa. They are financial institutions under the co-operative name. We are investigating; assets exceeding Rs. 1 billion are indicated despite being only a few years old. We must know the source of funds—whether member funds or otherwise. Approval was reportedly granted by a former Governor, and issues arise from the point of approval. We are probing member enrolment, elections and Board appointments, and whether institutions operating as banks under co-operative cover comply with the law and Central Bank regulations. Even the largest state bank cannot open a branch without approval, yet these entities have expanded rapidly. Questions also arise about potential money laundering. Accordingly, investigations into certain financial institutions operating under co-operative guise are underway.