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Report: Vatican to take €100m loss on London building

The Vatican Secretariat of State is set to record a loss of more than 100 million euros on the resale of a London building at the center of the current financial scandal and trial, according to a new report. 

The Vatican’s building at 60 Sloane Ave., London. Credit: Google Earth.


According to the Financial Times, the Vatican is in the final stages of selling the building to private equity firm Bain Capital for some 200 million pounds sterling, approximately 233 million euros, or 271 million dollars. 

The secretariat paid a reported total of 350 million euros for the property in 2018.

The sale comes amid an ongoing budget crisis for the Holy See.

The building at 60 Sloane Avenue, in Kensington, was fully acquired by the secretariat in as part of its separation from investment manager Raffaele Mincione. It was previously owned by Mincione, who bought it in 2012 for approximately 140 million euros. He sold a 45% stake in the development project to an investment fund managed by him in which the Holy See was the sole investor. 

The secretariat invested some 200 million euros in Mincione’s Athena Global opportunities Fund in 2014. That money came from loans taken out at two Swiss banks, Credit Suisse and BSI, the latter of which was subsequently shuttered by banking regulators for money laundering. 

In addition to investing the Vatican in the London building, which he owned, Mincione invested Vatican money in a range of projects, including several owned or managed by his other companies, and debt products sold by Gianluigi Torzi, also on trial in the Vatican for his role in the building’s purchase by the Vatican.

In June 2020, Vatican News described Mincione's management of Vatican investments as "speculative" and a "conflict of interest." 

Mincione has denied any wrongdoing on his part and he and his companies have sued the Secretariat of State in a UK court seeking declaratory relief — a statement by the court that he acted appropriately. He has also launched a lawsuit against the Italian newspaper La Reppublica over its coverage of his business dealings with the Vatican.

The Financial Times reported yesterday that a judge could rule on Mincone’s UK lawsuit by the end of the month. 

When the Vatican decided to separate from Mincione in 2018, it forfeited its investments in the Athena fund and paid an additional 40 million euros to exit the fund, in exchange for full control of the London building, which came with a 150 million euros mortgage attached. 

That debt was subsequently refinanced by the Institute for Works of Religion (IOR) a Vatican bank. Cardinal Pietro Parolin, the Secretary of State, wrote directly to the bank’s president, pressuring him to support the application which, he said, represented high-priority “needs of the Holy See.” 

In July 2019, Gianfranco Mammì, the IOR director general, complained to Vatican financial watchdogs about the “opacity” of the secretariat’s formal request for funds; that complaint triggered a two year investigation by Vatican law enforcement and led to the indictment of 10 individuals, including Cardinal Angelo Becciu, in July on charges of fraud, money laundering, abuse of office, and other financial crimes. Those charges are now the subject of an ongoing trial in Vatican City. 

It is not clear if the proposed sale to Bain represents a heavily discounted sale price on the building, or if the Vatican has been obliged to write off the mortgage debt as part of the deal.

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The loans used for the Vatican’s initial stake in the Athena fund were secured against other Vatican assets and funds controlled by the Secretariat of State, and then zeroed off from departmental balance sheets against the value of the investment, an accounting move which some Vatican insiders have said was intended to screen the investment with Mincione’s fund from oversight by the Vatican’s Secretariat for the Economy.

Cardinal Becciu, who was sostituto at the Secretariat of State at the time, charged with overseeing the department’s financial affairs, called reporting on the way the loans were used “false” and “shamefully misleading” in 2019. 

In a 2019 entry in his prison journal, published in 2021, Cardinal Geroge Pell, the former prefect of the Secretariat for the Economy, called the same reporting an “accurate account of the London property fiasco, and of the accounting procedures which were used to conceal it,” while noting Becciu’s denial. 

In an interview with Italian media earlier this month, Pell said the Vatican “would have saved a lot, a lot of money destined for the London building,” had his former department not been blocked by the Secretariat of State under Becciu.

Cardinal Becciu was moved from his position as sostituto at the Secretariat of State in June of 2018, made a cardinal, and appointed to lead the Congregation for the Causes of Saints. Whilst in that role, he reportedly continued to intervene in the financial affairs of his former department, including authorizing payment to Cecilia Marogna, the self-styled geopolitical strategist and security consultant, who is also on trial in the Vatican for alleged financial crimes.

After he left the secretariat, Becciu was also involved in presenting a bid to have the building bought back from the Holy See by a consortium of businessmen in what Vatican prosecutors say was an attempt to stymie their investigation.

In December 2020, Pope Francis stripped the Secretariat of State of its financial portfolio, and ordered the department to turn over control of all bank accounts and investments to the Administration for the Patrimony of the Holy See.

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