Audit shows losses and a cover-up at Coopera; meetings continue but large account holders are ‘not encouraged’

A preliminary audit of Coopera confirms what government investigators have suspected since taking control of the Cuenca-based financial cooperative in June: the coop had been losing money.

Comparing assets on hand with expenses, auditors announced that Coopera accounts show a shortfall of more than $7 million. The Superintendency of Popular and Solidarity Economy (SEPS) says that the coop had been running deficits since 2010 and that loses were concealed by bookkeeping sleight-of-hand.

As small Coopera account holders are being repaid, attention is shifiting to large account holders, those with investments of more than $10,000. SEPS chief Hugo Jácome and Azuay national assembly woman Liliana Guzmán were in town this week talking to large investor groups. They say meetings will continue next week.

Jácome says he is in discussions with two groups, one of Cuencano investors and one of foreign, mostly North American, investors.

SEPS announced in June that 99% of account holders would get their money back. Currently, account holders with less than $10,000, are collecting their money at several area coops assigned to handle Coopera accounts. SEPS says these represent 98.3% of all accounts. Eearlier, SEPS had said that some accounts of more than $10,000, amounting to .7% of all accounts, would be repaid at a later but unspecified date.

SEPS says there were 113,658 accounts at Coopera, although many had little or no funds in them. There are 1,661 accounts of more than $10,000.

Gustavo Quito, legal advisor to many large coop investors said that the announcement of the Coopera deficit raised concerns among depositors. “They want to know if they will ever get their money back.”

He said he hoped to get more informatoin Monday at a meeting at the Cuenca municipal building at Parque Calderon.

Quito and José Montesinos, a Coopera investor, says that so far, meetings with SEPS and other government officials have revealed little new information about the status of larger accounts. “Until we know more it is hard to plan a strategy,” said Montesinos.

Paul Edwards, who attended a meeting on Wednesday with other expat Coopera investors, said he is not encouraged by what he hears. “My lawyer says that there are losses and that the books have been changed to cover them. At this point, all I want is a little clarity.”

Another expat, Greg Stanfield, complained that account holders were being “smothered in bureaucracy. They are talking about some sort of special session and say we need to fill out more paperwork. I just want some information about the status of my money. Will I get something back or not?”

Coopera, or Cooperativa de Ahorro y Crédito Coopera Ltda., was closed by the federal government on June 12, when three members of top management were arrested on suspicion of money laundering.

Photo caption: Coopera account holder protest last week in Parque Calderon; photo credit: El Mercurio.