Unpaid Coopera members prepare to sue the government; attorney says 70% of coop funds are still outstanding

Jan 23, 2014 | 0 comments

Attorneys for unreimbursed Coopera members say they are ready to file legal action against the government for poor oversight of the Cuenca-based financial cooperative. Coopera was closed by the government last June when top management and several board members were arrested for embezzlement and money laundering.
chl coopera
Attorney Tarquino Orellana says that the Superintendency of Popular and Solidarity Economy (SEPS), the agency charged with monitoring the country’s financial coops, should have discovered bookkeeping irregularities at the coop long before the closure was ordered. “If they had done their job my clients would not be suffering financial loses today.”

SEPS says it has paid back more than 99% of Coopera members but Orellana says that the reimbursements represent only 30% of the money held by cooperative at the time it was shut down. In late December SEPS said it would reimburse more members in January but has not provided dates or specifics other than to say that the “sick and vulnerable” will receive preferencial treatment for the pay-backs.

According to Orellana, the government is liable for losses under Article 11 of Ecuador’s constitution. The article says that, if by omission or poor oversight, the government does not protect the interests of citizens it must cover loses.

In response to a legal request, SEPS has said it cannot reimburse members and does not believe it is liable.

Government liquidator Diego Aguilar is attempting sell Coopera assets to reimburse creditors and members. Several food markets and real estate parcels were put out on bid earlier this month but received only one offer – from SEPS itself. Other property will be offered for bid later this month, according to Aguilar.

Photo caption: Coopera members are turned away from cooperative headquarters in June


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