A GROUP of eight concerned members of the Musselburgh & Fisherrow Co-op in East Lothian have won a court injunction to halt plans to privatise the society while a Financial Services Authority investigation is under way.
A confirmatory meeting called to rubber-stamp an original overwhelming vote in favour of demutualisation was cancelled just hours before it was due to start with Edinburgh Court of Session judge Lord Kingarth ordering the society to pay the costs of the hearing.
In addition, Lord Kingarth instructed the society to respond to the court within a week to 19 governance and procedural points raised by the petitioners.
A statement issued by M& F Chief Executive Tom Lees said the October 17th meeting was cancelled because "there is a strict timetable to comply with which cannot now be fulfilled. The present process for conversion will not be able to be taken any further."
Said the statement: "Eight members of the society – George Cunningham, Peter Henderson, Margaret Bell, Ruth Chambers, Maisie Brown, Phyllis Leith, Mary Pearson and Daniel McNeill – raised an action in the Court of Session calling for the cancellation of the meeting on the grounds that the FSA investigation should conclude prior to any meeting and that the requirements in convening the meeting had not strictly followed the correct procedure.
"The requisitionists believed that, in the absence of a full board, the procedure had been followed, but had to accept the legal point made."
The resignation of three of the six Musselburgh directors in recent weeks has meant that the Musselburgh board is inquorate and unable to deal with items that require boardroom approval – effectively leaving the co-op in limbo.
Mr Lees told the News that the existing directors would meet urgently to address the issues raised by the Court of Session's ruling and pointed out that one of the items on the agenda for the cancelled meeting was the need to 'fast-track' the appointment of directors to fill vacancies.
Although the injuction is being seen as a victory for the co-operative ethos in its opposition to carpet-baggers, Co-op activists are aware that, while an important victory appears to have been won, the demutalisation issue may not necessarily be dead and buried for all time.
When asked by the News if the process might be re-started at a future date, Mr Lees said: "I've no idea. It would be up to the members."
A spokesperson for Co-operatives UK, told the News: "Our only concern throughout this process has been to ensure that all the members of Musselburgh and Fisherrow Society are able to take part in the key decision making about the future of their society. In this respect we welcome the court's decision."