JOHN GREEN, MR
The controversial demutualisation of MyState Credit Union has let to the formation of an organisation called Cooperation Tasmania.
The aim of the organisation is to preserve the principal of credit unions and to preserve Tasmania’s only remaining credit union.
Credit unions are non profitable organisations whereby persons can invest money and borrow money from each other using the mechanism of the credit union.
Because they are no shareholders there is no need to make a profit at the expense of members.
The members can normally borrow money on more favourable terms than from commercial organisations and with a low fee structure; also credit unions take a much more sympathetic approach to members who may find themselves in financial difficulties.
If the MyState Credit Union is demutualised all those benefits will be lost and members will find themselves in a debtor creditor relationship with a corporation that is only interested in profits.
That will lead to the current practice of no service, computerised telephone lines which take hours to answer calls, high fees and high interest rates.
All caused by senior management receiving large salaries and bonuses and directors getting large fees.
Corporation Tasmania intends to complain to ASIC about the process of demutualisation.
It is asserted that the management and board of directors of MyState Credit Union are in breach of the constitution which is designed to preserve the principal of credit unions and mutual cooperative associations. By spending large amounts of members money employing telemarketers to convince people to support demutualisation on the basis that at the end of the process they will get a share which they can sell for more than one thousand dollars, a process reinforced by sending out a sell form with the proxy forms in the information booklet.
The 240 page information booklet is unlikely to be read because it is so long but the telemarketer with the promise of a thousand dollars is probably much more persuasive.
That is of dubious legality.
To make matter worse persons who have not been members for a number of years have received proxy forms and a person with more than one account has received proxy forms for each account, so they will be able to have multiple votes.
The envelope which accompanied the booklet is not addressed to the Registrar as is a required by the proxy form so there is no guarantee that the proxies will be properly received or counted in the ballot.
It is hoped that these matters may persuade ASIC to investigate this matter and could lead to later legal actions.
If MyState Credit Union succeeded in demutualising and becoming a company and then in effect a bank there is no doubt that eventually it would eventual be taken over by one of the major banks.
Nearly all the small banks like St George Bank and Adelaide Bank and many others have been taken over by the major banks in due course.
It would not take a good corporate lawyer very long to work out ways of overcoming any safeguards which may be claimed to prevent this occurring.
The feeling on this matter is so intense that over one hundred and twenty persons have signed a petition to remove the directors of MyState Credit Union.
The petition will be presented once demutualisation attempt has been defeated.
