Rubco lands cooperative in crisis
CPM-led co-ops were forced to give loans to RUBCO
KOZHIKODE: The famed cooperative movement in Kannur is in severe crisis. Over 50 cooperative societies are facing closure threat after lending about Rs 300 crore to the ill-fated RUBCO, a rubber goods maker under the cooperative sector.
The cooperative societies under the control of CPM unions were forced to give loans to RUBCO following a party directive. The depositors in these cooperative societies are bound to lose their money as RUBCO is in no position to repay the loans.
The CPM leadership had tried to assist RUBCO whenever it faced financial crisis. Sources said that the previous LDF government diverted about Rs 300 crore from the National Cooperative Development Corporation (NCDC) and gave it to RUBCO.
The NCDC funds are meant for the overall development of cooperative societies in the state, which were diverted for RUBCO.
“The CPM leadership continued to support RUBCO despite its poor performance and forced the cooperative banks under its leadership to provide about Rs 100 crore as loan.
The cooperative societies provided about '300 crore. Still RUBCO continued to perform poorly and the societies and banks have lost the money.
If steps are not taken to return the amount to the cooperative societies, the depositors will lose their money and many societies will be closed down,” a cooperative society director from Kannur told DC.
When contacted, Mr C.N. Balakrishnan, Minister for Cooperation, Khadi and Village Industries, told DC that the government could not help the cooperative societies.
“The societies and banks will have to move legally to get back the loans. RUBCO cannot return the amount due to its present financial condition. The government cannot do anything to help the societies,” he added.