This coun­try’s reg­u­la­tor for co-op­er­a­tives has slammed the man­age­ment of East­ern Cred­it Union for what it de­scribed as the “fla­grant dis­re­gard” for the laws and reg­u­la­tions put in place to pro­tect mem­bers.

And, as such, the reg­u­la­tor is now threat­en­ing le­gal ac­tion against East­ern Cred­it Union.

The ad­mo­ni­tion came from act­ing Com­mis­sion­er for Co-op­er­a­tive De­vel­op­ment, Deb­o­rah-Ann Scott, on Mon­day fol­low­ing an an­nu­al gen­er­al meet­ing held by East­ern on Sat­ur­day, which the reg­u­la­tor said was held in breach of reg­u­la­tions and bye-laws.

On Sat­ur­day, East­ern Cred­it Union held a hy­brid 48th AGM.

A to­tal of 400 peo­ple were fa­cil­i­tat­ed in-per­son at Trin­i­ty Col­lege East’s au­di­to­ri­um, while all oth­ers mem­bers were ac­com­mo­dat­ed on­line.

“The Co-op­er­a­tive De­vel­op­ment Di­vi­sion (CDD) wish­es to con­vey its con­cern with the pro­ceed­ings con­duct­ed at the meet­ing held on April 22. The com­mis­sion­er has be­come aware that dur­ing the course of the meet­ing, while ad­dress­ing mat­ters rel­e­vant to the au­dit­ed fi­nan­cial state­ments, Mr Dwayne Ro­driguez, rep­re­sent­ing the firm PWC, con­firmed that the au­dit was signed off to which he re­spond­ed April 20, 2023.

“The com­mis­sion­er is al­so aware that this raised ques­tions as to the le­git­i­ma­cy of the meet­ing giv­en that the no­tice of the AGM was giv­en on March 19, 2023,” Scott’s let­ter stat­ed.

Co-op­er­a­tive of­fi­cer II Al­li­son Man­odath, who was at the meet­ing, in­di­cat­ed that this ac­tion con­sti­tut­ed a breach of Reg­u­la­tion 18 of the Co-op­er­a­tive So­ci­eties Reg­u­la­tions and ad­vised that the meet­ing be dis­con­tin­ued.

This ad­vice was fur­ther re­it­er­at­ed by of­fi­cers of the CDD dur­ing a con­fer­ence call held with the Sec­re­tary of East­ern’s Board Aman­da Aguil­era-Loubin and the cred­it union’s at­tor­ney Lloyd Robin­son.

“The com­mis­sion­er is aware that de­spite the guid­ance of the di­vi­sion, the meet­ing pro­ceed­ed,” Scott’s let­ter stat­ed.

Scott said the ac­tion of is­su­ing the No­tice of the AGM be­fore the re­ceipt of the au­di­tor’s re­port con­sti­tutes a breach of Reg­u­la­tion 18 and Bye-Law 15 (a) of the So­ci­ety’s Bye-Laws.

Reg­u­la­tion 18 of the Co-op­er­a­tive So­ci­eties Reg­u­la­tions states:

“The an­nu­al gen­er­al meet­ing of a so­ci­ety, of which at least sev­en days’ no­tice shall be giv­en to the mem­bers, shall be con­vened by the board not lat­er than three months af­ter the re­port on the au­dit of the ac­counts of the so­ci­ety is re­ceived by the board.”

This is fur­ther but­tressed in Bye-Law 15 (a) which states:

“The an­nu­al gen­er­al meet­ing shall be held no lat­er than three months af­ter re­ceipt of the au­di­tor’s re­port on the ac­counts of the so­ci­ety. At least 14 days’ no­tice of the meet­ing shall be giv­en to all mem­bers. The no­tice shall state the time and place of the meet­ing and the busi­ness to be trans­act­ed.”

Scott said this showed that the act of con­ven­ing the meet­ing is done fol­low­ing the re­ceipt of the au­di­tor’s re­port.

“A log­i­cal ap­proach, there­fore, en­tails the is­su­ing of a no­tice of the meet­ing in com­pli­ance with the reg­u­la­tion (at least sev­en days’ no­tice) and the con­ven­ing of the meet­ing with­in three months of the date on which the re­port is re­ceived by the so­ci­ety,” it stat­ed.

“You are there­fore ad­vised that in light of the breach of the Reg­u­la­tions and the So­ci­ety’s Bye-laws and any de­ci­sions tak­en at the said meet­ing are deemed null and void. In light of such nul­li­fi­ca­tion, you are to note that the sta­tus quo re­mains un­til such time as a du­ly con­sti­tut­ed AGM is held,” Scott’s let­ter stat­ed.

Scott said that East­ern must pre­pare to con­duct a valid AGM with­in three months af­ter the date of re­ceipt of the au­di­tor’s re­port which was on April 20.

Scott said this is to be done by the out­go­ing East­ern Board in keep­ing with the pro­vi­sions of the Co-op­er­a­tive So­ci­eties Act and its Reg­u­la­tion and in keep­ing with the So­ci­ety’s Bye-laws.

“The di­vi­sion wish­es to state its dis­ap­point­ment with the ac­tions and be­hav­iour of the East­ern Cred­it Union man­age­ment and we are deeply con­cerned about the in­ter­ests of the mem­bers giv­en the fla­grant dis­re­gard ex­hib­it­ed for the laws and reg­u­la­tions that are in place to pro­tect mem­bers,” it stat­ed.

“You are re­mind­ed that fail­ure to rem­e­dy the breach may re­sult in le­gal pro­ceed­ings be­ing in­sti­tut­ed against the So­ci­ety in keep­ing with Sec­tion 71 of the Co-op­er­a­tive So­ci­eties Act Chap 81.03 more specif­i­cal­ly in this in­stance, with Sec­tion 71(2) which states,” Any per­son who wil­ful­ly or with­out rea­son­able cause dis­obeys any sum­mons, or­der or di­rec­tion law­ful­ly is­sued un­der the Act or the reg­u­la­tions is guilty of an of­fence,” Scott stat­ed.

For­mer pres­i­dent com­ments

Wayne Estra­da, the for­mer pres­i­dent of East­ern Cred­it Union, al­so wrote to Scott out­lin­ing what he wit­nessed first-hand at the meet­ing.

He at­tend­ed the meet­ing both in-per­son and vir­tu­al­ly.

Estra­da said when the is­sue of the last pub­lish­ing of the au­dit­ed re­sults was raised, the chair­man Arvin Isaac apol­o­gised and ad­journed the meet­ing for lunch.

“I no­ticed that the co-op­er­a­tive of­fi­cer as well as sev­er­al per­sons left the meet­ing both in per­son and vir­tu­al­ly,” Estra­da stat­ed in his let­ter.

“Up­on his re­turn af­ter lunch, the chair­man, Mr Isaac, notwith­stand­ing the co­op­er­a­tive of­fi­cer’s rul­ing, sought to have a mo­tion for the amend­ment of the agen­da to fa­cil­i­tate the elec­tions in­stead of ad­journ­ing the meet­ing as di­rect­ed.

“A mem­ber chal­lenged the chair and en­quired what was the sta­tus of the di­rec­tive giv­en by the com­mis­sion­er’s of­fice. The chair­man in­di­cat­ed amongst oth­er things that com­mu­ni­ca­tion was had with the com­mis­sion­er’s of­fice and, that he al­so re­ceived le­gal ad­vice which in­di­cat­ed that it is ‘a ques­tion of in­ter­pre­ta­tion’ and that he would con­tin­ue with the meet­ing,” Estra­da stat­ed.

Estra­da said the meet­ing con­tin­ued and the agen­da in­clud­ing the elec­tion of a new board was com­plet­ed.

“East­ern’s Board can­not be a law un­to it­self. Of what use is the reg­u­la­tor if its di­rec­tives could be ig­nored with im­puni­ty,” he stat­ed.

“I am al­so aware that the com­mis­sion­er gave a di­rec­tive to Tran­quil­li­ty Cred­it Union and they com­plied with the same, un­der sim­i­lar cir­cum­stances. I am al­so aware that the reg­u­la­tor has trig­gered Sec­tion 4 of the Co-op­er­a­tive So­ci­eties Act at ECU,” Estra­da stat­ed.

On May 7 last year, a Guardian Me­dia ex­clu­sive head­lined “Con­fu­sion at East­ern Cred­it Union” high­light­ed sev­er­al is­sues af­fect­ing the in­sti­tu­tion.

In March 2021, the or­gan­i­sa­tion’s chief ex­ec­u­tive of­fi­cer and one of its di­rec­tors were dis­missed, and two oth­er di­rec­tors were sus­pend­ed from the board.

And dur­ing that time, the body tasked with su­per­vis­ing cred­it unions al­so launched an en­quiry and an in­ves­ti­ga­tion in­to ECU’s op­er­a­tions.

Richard No­ray, who re­signed as the pres­i­dent of the cred­it union last week, was ap­point­ed East­ern’s chief ex­ec­u­tive of­fi­cer on Mon­day.

The Busi­ness Guardian un­suc­cess­ful­ly at­tempt­ed to con­tact No­ray on Tues­day for a com­ment on the an­nu­al meet­ing.

In June last year, High Court Jus­tice Frank Seep­er­sad said a com­pre­hen­sive re­view of ECU’s “prac­tices, poli­cies and modus operan­di” may be need­ed, as he hand­ed down the judg­ment in a li­bel and slan­der mat­ter be­tween ECU’s for­mer di­rec­tor Har­vey Bor­ris and the cred­it union’s for­mer pres­i­dent Wayne Estra­da. Bor­ris’ claims were even­tu­al­ly dis­missed.

Lat­er that month, Seep­er­sad stat­ed that “ev­i­dent­ly, all is not well at ECU,” as he de­liv­ered judg­ment in a law­suit brought by Ger­ard Matthews, a sus­pend­ed ECU di­rec­tor, chal­leng­ing the va­lid­i­ty of the cred­it union’s elec­tion held in No­vem­ber.

Al­so in June, ECU re­moved it­self from the re­mit of the Cen­tral Bank, days af­ter mem­bers of its board held a press con­fer­ence where ac­cu­sa­tions were made con­cern­ing a reg­u­la­tor col­lud­ing with a dis­grun­tled for­mer board mem­ber to de­stroy the or­gan­i­sa­tion.