Coop Loss: $13.5M in 2 Years
- San Salvador - COASPAE, a cooperative savings and credit association for business administration professionals, is grappling with liquidity problems and significant financial losses, raising concerns among its members.
- An independent audit report reveals that COASPAE (Cooperative Savings and Credit association of professionals in business administration and related careers, of limited liability) has suffered losses totaling $13.5...
- According to the audit, the cooperative experienced a $9.3 million loss in 2023, followed by an additional $4.2 million loss in 2024.
Savings cooperative COASPAE Faces Liquidity Issues, $13.5 Million in Losses
Table of Contents
- Savings cooperative COASPAE Faces Liquidity Issues, $13.5 Million in Losses
- FAQ: COASPAE savings Cooperative Liquidity Crisis
- What is COASPAE?
- What financial issues is COASPAE facing?
- How much money has COASPAE lost?
- What were the losses in 2023 and 2024?
- What is causing COASPAE’s liquidity problems?
- Are members able to withdraw their savings?
- What recovery plan is COASPAE implementing?
- Were any loans given to COASPAE executives?
- What about potential conflicts of interest?
- What is happening with the member, MMS, who is trying to recover her contributions?
- What are the key takeaways from this situation?
San Salvador – COASPAE, a cooperative savings and credit association for business administration professionals, is grappling with liquidity problems and significant financial losses, raising concerns among its members.
Audit Reveals Consecutive Years of Losses
An independent audit report reveals that COASPAE (Cooperative Savings and Credit association of professionals in business administration and related careers, of limited liability) has suffered losses totaling $13.5 million over the past two years.
According to the audit, the cooperative experienced a $9.3 million loss in 2023, followed by an additional $4.2 million loss in 2024. Auditor Fausto Moisés Gómez Alfaro noted that these losses, combined with high withdrawal demands and other financial strains, are significantly impacting the cooperative’s ability to operate normally.
The audit report, to which The Associated Press has gained access, states that the cooperative’s administration did not fully disclose the extent of these risks in its financial statements.
Executive Director Acknowledges Challenges
Julio Adalberto Linares Sorto, Executive Director of COASPAE, acknowledged the cooperative’s financial difficulties during a press conference Wednesday. He attributed the liquidity issues to a “panic wave” among members, triggered by the recent intervention of another cooperative, COSAVI, due to alleged embezzlement.
“the cooperative has a problem of illiquidity as there is a group of associates that has been taking out their money,” Linares Sorto said, fearing a similar fate to COSAVI.He denied any ongoing money laundering investigations against COASPAE.
Members Struggle to Access Savings
For months, some COASPAE members have reported difficulties withdrawing their savings, even after their term deposits have matured. some retirees also claim they have not received their contributions.
Many members, frequently enough elderly, have been lining up early in the morning, hoping to be among the few who receive a limited payout of $150, two or three times a week, according to reports.
Cooperative Outlines Recovery Plan
Linares Sorto presented a summary of the XIX General Assembly of partners, held May 9, outlining plans to update membership data and address overdue term deposits. He stated that COASPAE intends to allocate $600,000 per month to resolve these payment issues.
Regarding the reported losses, Linares Sorto said the cooperative is working to recover assets that had previously generated accounting losses. “As we recover those properties, that loss will go down,” he explained.
Concerns Over Loans to Executives
Questions have arisen regarding loans granted to COASPAE executives, particularly concerning the rapid repayment of a $250,000 mortgage loan taken out by linares Sorto in October 2022. The loan, initially scheduled for repayment over 360 months, was reportedly paid off in less than a year.
When questioned about potential conflicts of interest, Linares Sorto asserted that COASPAE has mechanisms in place to prevent money laundering and that no cases have warranted reporting to the Attorney General’s Office.
Member Awaits Return of Contributions
One COASPAE member,identified as MMS,has been attempting to recover her contributions since October 2022. Despite an order from the Salvadoran Institute for Cooperative Growth (INSAFOCOOP) to release the funds, MMS has yet to receive her money.
COASPAE reportedly proposed deducting 63% of her contributions to cover cooperative losses, which MMS refused.
FAQ: COASPAE savings Cooperative Liquidity Crisis
What is COASPAE?
COASPAE (Cooperative Savings and credit association of professionals in buisness management and related careers, of limited liability) is a savings and credit cooperative based in San Salvador, El salvador, primarily serving business administration professionals. The organization is facing financial difficulties.
What financial issues is COASPAE facing?
COASPAE is facing significant financial challenges, including:
Liquidity Problems: The cooperative is experiencing difficulties meeting member withdrawal requests.
Financial Losses: An independent audit revealed losses totaling $13.5 million over two years.
Member Concerns: Members are struggling to access their savings, including matured term deposits and contributions.
How much money has COASPAE lost?
The cooperative has suffered losses totaling $13.5 million over the past two years, according to an independent audit.
What were the losses in 2023 and 2024?
2023: The cooperative experienced a $9.3 million loss.
2024: An additional $4.2 million loss was recorded.
What is causing COASPAE’s liquidity problems?
Julio Adalberto linares Sorto, the Executive director of COASPAE, attributes the liquidity issues to a “panic wave” among members. This was triggered by the recent intervention of another cooperative, COSAVI, due to alleged embezzlement. High withdrawal demands combined with existing financial strain are impacting the cooperative’s ability to operate normally.
Are members able to withdraw their savings?
No,some members have reported difficulties withdrawing their savings. the article states that some members are unable to access their savings, even after their term deposits have matured. Some retirees also claim they have not received their contributions. Members have been lining up to receive limited payouts.
What recovery plan is COASPAE implementing?
COASPAE presented a recovery plan during the XIX General Assembly of partners on May 9th. The plan includes:
Updating membership data.
Addressing overdue term deposits.
Allocating $600,000 per month to resolve payment issues.
* Recovering assets that previously generated accounting losses.
Were any loans given to COASPAE executives?
Yes, questions have arisen regarding loans granted to COASPAE executives. The article specifically mentions the rapid repayment of a $250,000 mortgage loan taken out by Executive Director Julio Adalberto Linares Sorto in October 2022. The loan, initially scheduled for repayment over 360 months, was reportedly paid off in less than a year.
What about potential conflicts of interest?
When questioned about potential conflicts of interest, Julio Linares Sorto asserted that COASPAE has mechanisms in place to prevent money laundering and that no cases have warranted reporting to the Attorney General’s Office.
What is happening with the member, MMS, who is trying to recover her contributions?
A COASPAE member, identified as MMS, has been attempting to recover her contributions since October 2022. Despite an order from the Salvadoran Institute for Cooperative Growth (INSAFOCOOP) to release the funds, MMS has yet to receive her money. COASPAE reportedly proposed deducting 63% of her contributions to cover cooperative losses, which MMS refused.
What are the key takeaways from this situation?
Here’s a summary of the key issues:
| Issue | Details |
| ————————— | ———————————————————————————————————————————————- |
| Financial losses | $13.5 million over two years,with $9.3 million in 2023 and $4.2 million in 2024. |
| Liquidity Problems | Difficulties in meeting withdrawal demands, leading to limited payouts. |
| Member Concerns | Inability to access savings and contributions, creating hardship for members. |
| Executive loan Concerns | Questions raised over the rapid repayment of a mortgage loan to the Executive Director. |
| recovery Plan | Emphasis on updating membership data, addressing overdue deposits, and recovering lost assets.|
| Member Disputes | One member’s ongoing struggle to retrieve contributions, demonstrating the complications members face. |