Report: Vatican Set to Lose More Than £100 Million on Failed London Property Deal
The ‘Financial Times’ said the Holy See invested more than $400 million into the real estate, which will sell for around $270 million.
VATICAN CITY — The Vatican stands to lose about £100 million ($136 million) when it completes the pending sale of a London property at the center of an ongoing fraud trial at the Vatican, according to a report in the Financial Times.
In a Nov. 7 article, the newspaper reported that the Vatican is in the final stages of selling 60 Sloane Ave., a luxury London property, having invested a total of £300 million ($406 million) in the building that will now sell for about £200 million ($271 million).
From 2014 to 2018, the Vatican reportedly invested hundreds of millions of pounds into the prime real estate, located in London’s prestigious Knightsbridge district.
Vatican prosecutors in the fraud trial of 10 officials say the funds were derived from donations to Peter’s Pence and intended “for the many different needs of the universal church and for the relief of those most in need.”
Observers who have closely monitored the London deal told the Register Nov. 9 that the losses are likely higher than those estimated.
Vatican prosecutors have also alleged that Vatican officials were the victim of a complex fraud, and they hope to show this in a trial that has so far been hindered by procedural errors.
As a result of the losses, Pope Francis last year ordered that such off-balance sheet funds and real estate handled by the Secretariat of State be transferred out of the dicastery and given instead to the Administration of the Patrimony of the Holy See (APSA), which handles most of the Vatican’s patrimony and running expenses.
The Financial Times reported that the speculative investment in a booming London property market had perplexed some commercial agents and investors, with one veteran realtor saying they “couldn’t quite understand how they [the Vatican] had lost money on it.”
Among the 10 defendants charged in the Vatican trial is Raffaele Mincione, a former Italian banker, who is accused of various crimes including fraud and embezzlement all of which he denies.
Mincione’s companies acquired the London building in 2012 for £129 million ($175 million). Two years later, a unit of the Vatican secretariat of state managing charitable donations bought a stake in the property via an investment fund, founded by Mincione, at a far higher valuation.
According to Vatican prosecutors, Mincione’s companies made a large profit from investing in the Knightsbridge building, but he insists that the increase in the property’s value was justified by audited and independent third-party consultants. He has also said the Vatican was always advised by its own investment banks, and that he was unaware the money being invested on behalf of the Vatican was derived from charitable funds, the Financial Times reported.
The alleged enormous losses were compounded by further management errors that included the hiring of Italian financier Gianluigi Torzi whose services cost the Vatican 15 million euros ($17 million) in fees, according to the official Vatican indictment.
Vatican criminal proceedings against Mincione, Torzi and 8 others, including Cardinal Angelo Becciu, who served as deputy secretary of state from 2011 to 2018, were paused last month and charges against the accused temporarily lifted after the Vatican judge requested that the prosecutors provide additional evidence to the defense lawyers.
Although that evidence was provided on Nov. 3, lawyers for the defense complained that portions of the video files of depositions were still missing — a charge some analysts have disputed because the missing material amounts to just a few minutes.
Despite the complexity of the case, one source close to the process said it is possible to ascertain the lion’s share of the guilt by asking a few basic questions, namely: Where did the losses from the property deal go, who made money from the deal, and who lost money?
Criticism of Media Coverage
The case has not been helped by the media’s coverage, say Vatican prosecutors and others involved in the trial.
“I continue to witness total misinformation,” the Vatican’s deputy chief prosecutor, Alessandro Diddi, told the Register last month. “I read things that are really obscene and I’m really disappointed to read them because I have better things to do than having to reply to them.”
Recalling how the Italian daily newspaper Corriere della Sera claimed before the trial had begun that the Vatican had fabricated false evidence, Diddi said such misinformation “is an insult to our office.”
A source close to the trial also criticized the media coverage, dismissing allegations of losses as "based on sensational allegations, speculation, inferences, chit-chat and gossip, but that is not a service to the truth,” the source said.
“Journalists shouldn’t be a substitute for the court,” the source added. “Let the court do its work and then after the sentence there can be commentary.”
- sloane ave
- london property deal
- raffaele mincione
- gianluigi torzi
- cardinal angelo becciu
- edward pentin