Otokito said that the government frowned at a development where the groups got registration and approvals to operate as cooperatives

He said that they later modified its bye-laws to include forex trading, noting that the bye-laws could not be superior to the extant laws.

Otokitio said that the state government remained committed to the development of cooperatives and the safety of investors’ funds.

He explained that the Bureau of Cooperatives Development, a parastatal under the Ministry of Trades and Investment, was in receipt of several petitions from members of cooperative societies engaged in foreign exchange trading and was monitoring the situation.

“The director of the Bureau of Cooperatives told me that there are so many petitions from members of cooperative societies whose funds are trapped in Forex schemes.

“I have been getting text messages and it is worrisome to see peoples hard earned money go down the drains.

“Our Cooperatives Law of 2014 does not include foreign exchange as one of the areas that cooperatives can engage in but what they do is to apply and get registration to operate cooperatives and after getting approvals the review their bye-laws to include Forex trading,” he said.

It would be recalled that Baraza, most popular cooperative in Bayelsa was using the cooperative model to mobilise funds from it’s members, It, however, failed to meet its 25 per cent monthly returns payment obligations, thereby trapping funds running into billions of naira for its over 40,000 investors.

Baraza had since March halted the monthly payment of 25 per cent returns to subscribers to the scheme and announced a three month suspension of payment of returns to allow it recover from the crash.

The Economic and Financial Crimes Commission had in April cautioned members of the public to be wary of investment schemes that offer mouth watering returns for the safety of their hard earned money.

Meanwhile, Dr Miebi Bribena, Chief Executive of Baraza Multi Purpose Society, in a reaction to reports of petitions by members whose returns were due since March, confirmed that the society had ‘paused’ payment of returns to recover from challenges faced by the society.

On the directives by the Securities and Exchange Commision (SEC) to all entities engaged in mobilising investors funds for investment in financial derivatives using digital platforms, Briebina insisted that cooperatives were not being regulated by SEC.

“SEC does not regulate Cooperative Societies, so we will seek clarification on this directive.

“The Nigerian Cooperative Act 2004 defines how Cooperatives should operate. We do not mobilise public funds but use only members funds.

Meanwhile Baraza has paused payout till July 19 to focus on the Road to Recovery,” Briebina said.