QCOSTARICA — Coopeservidores is officially bankrupt, but will avoid going through the formal bankruptcy process, announced on Friday, June 21, the Conassif appointed auditor.
“Because the results and findings of the audit confirm the non-viability of the entity. Specifically, it is confirmed, among other elements, that the entity does not have the capacity, neither currently nor in the near future, to comply with the requirements of solvency given the continuous deterioration in the credit portfolio.
“Additionally, there are no viable measures for the capital contribution necessary for the entity to operate regularly. These elements denote the characteristics of an unviable financial intermediary, according to the provisions of prudential regulations,” said Marco Hernández, appointed by the Consejo Nacional de Supervisión del Sistema Financiero (Conassif) – National Council for Supervision of the Financial System.
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On the other hand, the auditor presented a proposed resolution that would allow the rescue of a set of valuable and desirable assets, which would be excluded to a solvent financial entity.
“In exchange, this solvent entity must assume all deposits and guaranteed loans, which would serve to make payments to creditors, in a relatively short period, which is estimated not to exceed two months,” the statement indicated.
The president of Conassif, Laura Suárez, said that this path is the “most favorable option for all those affected, in order to recover the greatest amount of money from savers.”
Suárez and Hernández asserted that sending the Cooperative to a bankruptcy process would represent a greater social cost due to the time required for depositors and creditors to access the resources.
The proposed process would establish, they explained, two figures, a set of quality assets and liabilities of the Cooperative that would be transferred to a solvent financial entity and a second “bad bank”, which would manage a trust with the primary objective of selling it completely in a maximum period of one year, while the recovery of said assets is managed.
Hernández explained a cut of around 20% would be applied to deposits of more than ¢6 million colones depending on what results from the resolution process.
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The Conassif assured that these decisions “reiterate the commitment to finding the best possible solution for the protection of savers’ resources, the financial stability of the country and the preservation of confidence in the financial system.”
This process, according to the Conssif, “guarantees” that those who had savings of up to ¢6 million will recover all their money.
It is important to note that the Deputy Prosecutor’s Office for Probity, Transparency and Anti-Corruption has a case open to investigate the actions of Conassif itself and the General Superintendence of Financial Entities (Sugef) in the case of Coopeservidores for alleged crime of breach of duties.
Last week, it was reported that an analysis carried out by Sugef revealed that it knew eight years before that the savings and loan’s loan portfolio had been reduced by ¢14 billion colones between 2009 and 2016, with an especially serious reduction of close to ¢7 billion colones in 2014.
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The report thus shows that the supervisory entities had known, for at least eight years, the financial situation of Coopeservidores, however, it was not until May of this year that their intervention was ordered.
The intervention of Coopervidoresbegan because the information requested from Coopeservidores on loan operations showed “serious deficiencies in its precision, consistency and integrity,” which prevented it from truthfully reflecting the situation of the credit quality of the portfolio.
Exacerbating the situation, the cooperative had applied massive payment moratoriums, avoiding reclassifying loan operations into higher risk categories and without carrying out any collection management.
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