Britain’s Co-operative Group has suffered a loss of 2.5 billion pounds in 2013. The year 2013 has been the worst in the Group’s 150 year history.
This could be chalked up to failures of management, sources claim. According to experts, the recent developments in the Group ram home the need for thoroughgoing reforms in the organization.
Revelation of a drugs scandal involving Paul Flowers , the former chairman of the Group has only added to the woes of the storied cooperative organization.
Co-op, hit by a yawning funding gap at its bank, a drugs scandal and an exodus of top executives, said on Thursday the results were a wake-up call to the serious challenges it faced.
“Today’s results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years.”
Co-op said 2.1 billion pounds of the total loss stemmed from its bank, which needed an emergency 1.5 billion pound recapitalisation last year that resulted in the group ceding control of the lender.
It also took a 226 million pound write-down on the value of stores it acquired in a 1.6 billion pound deal in 2009 to take over the Somerfield grocery chain.
The numbers lay bare failures of management at the group, whose main board is elected from regional and local co-operative organisations and which includes a nurse, a farmer, and a retired telecom engineer.
The group’s reputation was further tarnished by a drugs scandal involving the former chairman of the bank, Paul Flowers. Flowers, who was a Methodist minister, was charged with possession of drugs on Wednesday.
Flowers apologized last year for doing things he said were “stupid and wrong” and said he was seeking professional help.