The recent case of a cooperative being defrauded of $5.1 million in members' funds, by two of its employees, is a wake-up call to the authorities that tougher rules and stringent internal processes are required for co-ops.
The two women were given hefty sentences last Tuesday by the State Courts: One was given 12 years and the other, nine years and eight months.
The sentences send a clear signal that such fraudsters will face stiff punishments.
But the crime also underscores the need for co-ops to have a strong internal system of checks, and for tougher rules on financial reporting and governance to be introduced.
The changes are on the way.
Earlier this year, the Registrar of Co-operative Societies sought public feedback on proposed amendments to the Co-operative Societies Act, to raise governance standards and give the Government more regulatory powers.
The proposals include giving the Registrar powers to order special audits of co-ops and take action, like suspending co-op employees, if it deems it necessary to protect the interests of members.
These moves are critical as demonstrated in the recent case; there are no indications yet as to how the money will be recovered.
The duo - assistant manager Arni Ahmad, 42, and administrative executive Hanati Jani, 50 - have not made restitution to their former employer, the Singapore Statutory Boards Employees' Cooperative Thrift and Loan Society.
The co-op is waiting for an investigation by the Commercial Affairs Department to end before it decides on civil remedies to recover the money.
Since the recovery of the funds is uncertain, there is urgency in hastening the updating of the Co-operative Societies Act to prevent a repeat of this incident. The Act was last amended in 2008.
If given the nod in Parliament, it will send a clear message to the 84 registered co-ops, with about 1.5 million members, that punishment for any wrongdoing will be swift and firm.