Something Went Wrong With The Coop

The Coop referred to in the title of this article is the cooperative among i-café owners in the Philippines and will be called I-Café Coop for the rest of this post. The entity would have been the tax-free channel through which members and non-members alike could get their computer units, parts and software at prices lower than the usual outlets where i-café owners currently buy their needs. The I-Café Coop was also envisioned as the source from which its members can get the computer merchandise that they can sell to the public. As such, the I-Café Coop could easily become a large distribution network of computer units, parts and peripherals throughout the country.

The idea of a cooperative was well accepted by the community of i-café owners and very soon enough number was gathered to legally organize the I-Café Coop. A series of meetings were held to formalize its organization and some thirty (30) people willingly parted with their money that will form part of share capital of the business venture. In a General Assembly of members sometime in May 2010, they elected among themselves the people who will comprise the interim Board of Directors who, in turn, chose the Coop Officers (General Manager, Secretary and Treasurer) who will manage the day-to-day activities of the entity.

Everything seems to be working right for the I-Café Coop at the start. There was some delay in its documentation with the regulating government agency but the more than three-month period within which the Certificate of Registration was issued by the Cooperative Development Authority (CDA) was regarded by members as reasonable considering the bureaucratic red tape that such process underwent. Also, during the said 3-month period, the management worked on the  plans for the Coop’s core business and seek the  refinement of the terms of engagement with an importer of computer parts and accessories from whom the I-Café Coop will get its supply of merchandise.

I-Café Coop got its Certificate of Registration from CDA last August 31, 2010 and in compliance with the provisions of the Philippine Cooperative Code of 2008 (RA No. 9520), the interim Board of Directors (BoD) called a Special General Assembly (SGA) in September 11, 2010 to elect the regular BoD and approve the developmental plans of the cooperative. The SGA did not have a quorum so the election of the members of the regular BoD was not held but the presentation of the developmental plan was done by the Coop’s General Manager (GM).

It was during the GM’s presentation that I questioned the plan to use Delivery Receipts (DRs) on some of Coop’s future sales transactions. The GM suddenly turned ballistic and did not accede to my request to call a division of the house and vote on his proposal. I kept my peace during the whole proceedings but the issue did not stop there. The GM, in his letter of resignation emailed to the I-Café Coop members, cited my “disorderly behavior” and continued membership in the Coop as his reasons for leaving. The interim Chairman of the Board also resigned later on.

Left without the interim BoD Chairman and a General Manager, some well-meaning members exercised their rights under the law and petitioned the Acting Chairman (formerly BoD Vice-Chairman) and the remaining board members to call a Special General Assembly to discuss and decide the future of the cooperative. The Acting Chairman, the remaining BoD members and officers of the I-Café Coop were absent in the SGA held last October 13, 2010 where fourteen (14) regular members were present.

The Coop’s regular members decided to proceed with the SGA meeting and the financial status of the cooperative was the first topic discussed. Due to the absence of the remaining Coop officers, a phone call to the Coop Treasurer was made by a member in the SGA and the body was informed that only 22.27% of the total collections remain in the Coop’s fund. The 77.73% of the total amount collected from the members were disbursed to the two (2) Coop officers who resigned and are now employed by the importer mentioned above.

The cash advances made by the resigned officers were substantial enough to get the Coop business started but, as it is, the I-Café Coop only has the Certificate of Registration by the CDA to show, no BIR and Mayor’s permits. Left with insufficient fund and the restraint to call for fresh capital infusions, the current I-Café Coop members have to rethink and devise new business models if they intend to continue the business of the cooperative.