7.5.2 Inspections and investigations

The Co-operative and Community Benefit Societies and Credit Unions (Investigations) Regulations 2014 gives the FCA the same powers to investigate the affairs of a society as are currently held the Secretary of State to investigate companies under Part 14 of the Companies Act 1985. This includes the powers to direct a society to produce documents or information, or to authorise an investigator to enter the premises of a society to obtain such evidence. It is an offence to destroy or falsify information relating to the society’s affairs. At the request of a minimum of ten members, who also agree to underwrite the cost of the task, the FCA can appoint a professional person to inspect and report on the financial affairs of a society. The FCA has the powers to order that the costs of the inspection to be borne by the applicants, the society, or its officers, after the outcome of the inspection is known.

Section 106 of the Co-operative and Community Benefit Societies Act 2014 gives the FCA powers to appoint inspectors to investigate the affairs of the society, if so requested by at least 10% of the members of the society, or at least 100 members, whichever is the smaller number. The inspectors can be instructed to report to the FCA or a special meeting of the society. The applicants are required to underwrite the cost of the investigation, subject to the FCA determining who should bear the cost when the outcome of the investigation is known. The inspectors have far-reaching powers to inspect the accounts and documents of the society, and to question officers, employees and members of the society under oath. 

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