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Wednesday, December 1, 2021

Vatican London property sale loses 100 million pounds to charity fund

The Vatican will lose 100 million pounds to donate money to people in need after completing the sale of a luxury office building in London currently at the International Criminal Investigation Center.

According to several people familiar with the matter, the Vatican is in the final stages of selling the 60 Sloane Avenue building in the Knightsbridge district of London to the private equity group Bain Capital for approximately £200 million. Bain Capital and Savills, who managed the sale, declined to comment.

The Vatican stated that senior officials of the Holy See invested a total of 350 million euros in donations to the London building between 2014 and 2018, which means that the sale is expected to confirm the loss of approximately 100 million pounds for the Catholic Church.

The Vatican’s prosecutor said that the funds invested in this building and other investments came from Peter’s pennies. This is an annual donation by Catholics around the world. According to the Vatican, the purpose is to “satisfy the many different needs of the universal church. And to help those most in need”.

This London building, which was once intended to be converted into a luxury apartment, is at the center of a scandal that forced the Vatican to overhaul its financial management.

At the end of last year, Pope Francis deprived the Vatican’s powerful central administration office of a portfolio worth hundreds of millions of euros, which consisted of donations from Catholics.

The failed bet on the booming London real estate market has left some commercial agents and investors at a loss.

“I don’t quite understand how they [the Vatican] It’s already losing money,” said an agent with decades of experience in the London office market.

Earlier this year, Vatican prosecutors accused former Italian banker Raffaele Mincione (Raffaele Mincione) of fraud and embezzlement of public funds.

Mincione’s company acquired the London building in 2012 for 129 million pounds. Two years later, a department that manages charitable donations in the Vatican bought shares in the property at a much higher valuation through an investment fund created by Mincione. The Vatican acquired the rest of the building in 2018.

Vatican prosecutors said that Mincione’s company made huge profits by investing in the Knightsbridge Building.

He denied any wrongdoing, saying that the increase in the value of the property was certified by an audited independent third-party consultant. He also stated that the Vatican always provides advice from its own investment bank.

The Vatican’s criminal proceedings against Mincione and others (including a cardinal) were suspended last month, and the charges against the defendant were dismissed after the Vatican judge asked the prosecutor to provide additional evidence to the defense lawyer.

The lawyer representing Mincione said that the dismissal of the charges meant that the Vatican court’s case against him was “invalid” in law.

The Vatican stated that it does not agree with the state of the proceedings. Another hearing is expected to be held at the end of this month.

As part of the criminal investigation, at the request of the Vatican prosecutor, Mincione froze 48 million euros of assets in Switzerland. He is filing a separate civil lawsuit against the Holy See in the British High Court to seek “declaratory relief”. This ruling will judge his actions to be correct.

Mincione has said that he never realized that the funds invested on behalf of the Vatican came from charitable funds, and that Vatican officials should be responsible for the losses because they withdrew from the investment prematurely in 2018 and allowed the planning to permit the construction of luxury apartments to lapse. Vatican prosecutors claimed that the loss was the result of complex fraud.

The British court is expected to decide whether Mincione’s company can sue the Vatican before the end of this month.

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