The Vatican stands to lose 100 million pounds in charity donations with the sale of a London luxury building at the centre of a financial scandal, a report said Monday.
The Financial Times reported, citing unnamed sources, that the Vatican was in the final stages of selling the Knightsbridge building to private equity group Bain Capital for approximately 200 million pounds (233 million euros, $270 million).
That is approximately 100 million pounds less than the investment of about 350 million euros the Vatican made in the building beginning in 2014.
Pope Francis has vowed to bring more transparency to the Vatican’s financial dealings in the wake of the opaque, money-losing investment dating from 2013 — which spurred an investigation and allegations of fraud.
The scandal has been especially embarrassing since the invested funds came from Peter’s Pence, money donated by churchgoers for the pope’s charities.
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A once powerful cardinal, Angelo Becciu — the former right-hand man to the pope — and nine other defendants are currently on trial at the Vatican for financial crimes related to the deal.
Prosecutors have painted a picture of risky investments with little or no oversight, and double-dealing by outside consultants and insiders trusted with the financial interests of the Secretariat of State, the Vatican’s most important department charged with general affairs and diplomacy.
The current case dates back nearly a decade when the Secretariat borrowed more than $200 million to invest in a Luxembourg fund managed by an Italian-Swiss businessman, who prosecutors say used the money to invest in high-risk ventures over which the Church had no control.
After losing millions by 2018, the Secretariat tried to pull out of the deal, but the broker hired to cut ties with the fund manager is accused of instead joining forces with him.
The Vatican has a sizeable real estate portfolio, with figures released in July showing it owns 4,051 properties in Italy and another 1,120 in London, Paris, Geneva and Lausanne.
The property is to be sold to a private equity group Bain Capital.
Bain Capital & Mitt Romney
In 1984, Mitt Romney left management consulting firm Bain & Company to co-found the spinoff private-equity investment firm, Bain Capital. For the next 15 years, Romney presided over Bain Capital’s operations, which shifted focus over time from venture capitalism to leveraged buyouts. Mitt Romney profited $20K for every American laid off via Bain Capital.
Mitt Romney’s investment firm Bain Capital profited billions between 1992 and 1997 by collecting huge dividends for investors that eventually bankrupted American workers.
Bain Capital bets Billions of Dollars on India
Bain Capital is looking to deploy around $1 billion in Indian companies over the next three years. The US-based PE investor, which raised its fourth Asia-focused fund, the biggest so far, at $4.65 billion, has been a major investor in the country.
“If you look at over the last seven years, we have invested over $2.5 billion and are one of the biggest investors in the country. There is no reason why we cannot keep investing in India at the same pace,” said Amit Chandra, managing director and chairman of Bain’s India office, on the sidelines of Sankalp Global Summit held in Mumbai.
Bain’s enthusiasm to deploy a billion dollars in Indian private equity over the next few years, comes at a time when markets have remained volatile with credit flow being impacted, consumption too slowed as well as the country’s gross domestic product (GDP) – looking to pick a huge chunk of assets at the rate of pennies.
What about Indian workers?
This may sound good to the investors of Bain Capital, but what about Indian workers? Will the Bain management grant the Indian workers the same type of treatment as the American workers? Or worse?
Randy Johnson, a former worker said of the layoffs which began in the mid-1990s after American Pad & Paper, acquired by Romney’s Bain Capital, bought the paper company:
I really feel he didn’t care about the workers. It was all about profit before people. They quickly fired every single employee. They walked the fired workers out of the building. Handing them applications as they left, telling the workers if they wanted to work for the new company, they were welcome to apply.
Similarly, a number of former Dade Behring employees recalled to the New York Times how their lives were upended when their employers were acquired by Dade at the behest of Romney’s Bain Capital:
Cost-cutting became a mantra inside the company. After his employer, DuPont, was bought by Dade, William T. Mowrey, a field engineer, said his generous pension plan was replaced by a 401(k); his salary was cut by $1 an hour, costing him $2,000 a year in income. When he filed for overtime, he said, his new bosses refused to pay it. “They were just trying to milk as much out of us as they could,” he said.
Mr. Mowrey, now 54, quit. Many workers, like Mr. Shoemaker, the Dade employee in Westwood, and his wife, a temporary employee at the same plant, did not leave on their own terms. When they lost their jobs in 1997, they had to abandon plans to buy their first home together. “It created a lot of stress,” said Mr. Shoemaker, 59, who had earned more than $80,000 a year.
Looking at the past record of Mitt Romney’s Bain Capital, Indian workers it seem are set for a rude shock. The only question is, will Indian authorities take preventive measures before its too late?