Vatican sells charitable assets to repay € 242m loan from Credit Suisse
The Vatican sold charitable assets to repay a € 242million loan that was partly used to finance a luxury real estate development in London which it says caused the Catholic Church “huge losses” , said people with first-hand knowledge of loans.
The loan from Credit Suisse was secured by a portfolio of securities that the Holy See described as “donated” held at the Lugano branch of the Swiss bank, according to documents seen by the Financial Times.
News that Catholic charitable funds have been mortgaged to make risky financial investments adds to recent revelations that Vatican officials who oversaw the donations were engaged in complex financial engineering, some of which, according to the Holy See, resulted in losses.
Last month, Giovanni Angelo Becciu, the powerful cardinal who oversaw these investments between 2011 and 2018, was asked to resign by Pope Francis over allegations of “embezzlement” against him unrelated to loans or investment in London.
Cardinal Becciu denies any wrongdoing and has said he will defend himself against all allegations. The Vatican did not charge him with any crime. The Cardinal has repeatedly denied that charitable assets were invested in London property development. However, he did not respond to questions from the FT about donations used as collateral for loans used to finance investments such as real estate development.
The Vatican, which declined to comment, was not forced to sell assets by Credit Suisse but instead chose to voluntarily reduce its debts to the bank, a person briefed on the transactions said: “The Holy See is trying reduce its exposure to credit “.
Half of the net assets the Vatican held in a portfolio of 530 million euros at Credit Suisse was represented by a Luxembourg fund called Athena Capital, according to financial reports seen by the FT. Credit Suisse was the custodian bank for the portfolio but did not provide investment advice.
The Athena Fund in turn invested the majority of the money it was managing for the Holy See in a plan to develop an office building in London’s Chelsea district called 60 Sloane Avenue into luxury apartments, according to its accounts.
Earlier this year, the Vatican State newspaper published allegations made by Holy See prosecutors that the investment with Athena had resulted in “huge losses”, and that Raffaele Mincione, the owner of the fund, had “Managed the financial resources invested in a conflict of interest”. and in “speculative initiatives” – which he denied.
Mr Mincione denies any wrongdoing in his handling of Vatican money and does not believe that investing in London property was risky, speculative or inappropriate for the Vatican. He filed a lawsuit against the Holy See in London seeking a ruling that he, Athena and his other companies had “acted in good faith” in their dealings with the Vatican, as well as compensation and contingencies. damages and interests.
Enrico Crasso, who manages the Vatican money on deposit at Credit Suisse through his Switzerland-based consulting firm, said he was unaware the money was tied to charitable donations.
“When Becciu requested funding for the London building, he presented a letter from Cardinal Pietro Parolin, Secretary of State, saying that Becciu had full powers to operate all of the assets,” Crasso said in a statement. interview with the newspaper Corriere della Sera earlier. this month.
In June, Vatican police arrested Gianluigi Torzi, an associate of Mr. Mincione, accusing him of “extortion, embezzlement, aggravated fraud and self-laundering” for his role in negotiating ‘an outright purchase of the London building in 2018 from Athena on behalf of the Holy See.
The Holy See alleges that the agreement was reached at a “huge disproportion between the value of the property. . . and the price paid ”. Mr Torzi denied any wrongdoing and his lawyers said the arrest was the result of “a major misunderstanding”.