Washington, D.C. Newsroom, Jul 31, 2020 / 12:30 pm (CNA).- New details have emerged about the links between the two Italian businessmen at the center of the Vatican financial scandal.
In the months before Gianluigi Torzi was asked by the Holy See to act as middle man for the final purchase of the London property at 60 Sloane Ave. from Raffaele Mincione, a company owned by Mincione secured a multi-million-euro loan from a company controlled by Torzi.
Last month, Torzi was arrested by the Vatican and charged with a range of financial crimes. The following day, Vatican-state media accused Mincione of a “conflict of interest” in his management of investments for the Secretariat of State.
The Financial Times reported on July 30 that in January, 2018, Sunset Financial, a Malta based company controlled by Torzi, provided a 26.4 million euro line of credit to Pop 12 Sarl., a Luxembourg company owned by Mincione.
Corporate filings in Luxembourg, examined by CNA, show that the credit line, from which Mincione’s company borrowed nearly 14 million euros in January 2018, was secured against an investment in the Italian Banca Carige.
The filings also show that in 2018, Pop 12 paid Torzi’s company more than 700,000 euros for the arrangement of the loan and for other “legal consulting fees” related to its Carige shares.
In February 2018, Mincione’s company borrowed an additional 12 million euros from a line of credit extended Global Prime Partners, Ltd (GPP), a European prime broker. The line of credit was secured with the same collateral as the credit line from Sunset Financial: the Carige bank shares.
According to filings by Pop 12, since the GPP credit line was secured against “all the Carige shares held by the company,” the Sunset debt was subordinated to the GPP debt – meaning that, if necessary, Torzi could be repaid only after GPP.
Over the course of 2018, the share value of Carige collapsed, and Pop 12 reported a loss of nearly 17.5 million euros on the value of 24.9 million euro holding in the bank, leaving it unable to cover the loans from GPP and Sunset.
In November 2018, Torzi was asked by the Vatican Secretariat of State to broker the final purchase of the London building from Mincione.
Corporate filings in Luxembourg examined by CNA show that weeks after the final sale of the building to the Vatican, Mincione loaned millions of euros from his Athena Capital Real Estate and Special Situations Fund 1 (through which he owned and sold the building) to Pop 12 to repay part of the loan from GPP, which, because of the company’s debt structure, made it more likely Pop 12 could eventually repay its debt to Torzi’s company.
Both men have denied that the Pop 12 – Sunset loans played in Torzi’s role in the Vatican’s purchase of the London building from Mincione.
A spokesman for Mincione told CNA that “the suggestion that any commercial relationship between Pop 12 and Sunset Financial had any influence on the Vatican’s decision to appoint Mr Torzi as agent, is entirely wrong.”
CNA asked Mincione if Torzi, or Sunset Financial Ltd., were involved in Pop 12 securing the line of credit from GPP, and if there was any discussion, professional or social, between Torzi and Mincione of the Vatican’s investment in the London property prior to November 2018.
Mincione’s spokesman characterized the dealings between Pop 12 and Sunset as “a very usual commercial arrangement” and said “it doesn’t seem necessary for us to respond to [these] points.”
Details of the pre-existing business relationship between Mincione and Torzi come nearly two months after Torzi was arrested by Vatican authorities on charges of “extortion, embezzlement, aggravated fraud and self-laundering,” in relation to his part in the deal.
Following Torzi’s arrest, Mincione said that Torzi’s involvement in the London deal came at the instruction of the Secretariat of State without any input from him.
Speaking to ADN Kornos in June, Mincione said Torzi was a “counterpart,” not a “partner,” and characterized their personal connection casually as “two Italians in London.”
While dismissing their personal acquaintance, saying they knew each other slightly since their offices were off the same square in London, Mincione also told AN Kornos that he had in his possession a photograph of Torzi with Pope Francis. A similar image was subsequently released online.
The building at 60 Sloane Avenue was bought by the secretariat in stages between 2014-2018 from Mincione, who at the time was managing hundreds of millions of euros of secretariat funds. CNA has previously reported that Mincione also invested Vatican funds in other companies and projects owned by or connected to him.
The Vatican cut ties with Mincione in 2018, acquiring the whole of the London property and withdrawing its remaining investment with Athena, asking Torzi to broker the final transfer of ownership, which he did using his own Luxembourg holding company, Gutt SA, as a pass-through, earning Torzi some 10 million euros in the process.
Before Torzi’s arrest, CNA reported that Fabrizio Tirabassi, a lay secretariat official who oversaw investments, was appointed a director of Torzi’s company while the businessman was finalizing the Vatican’s purchase of the London property from Mincione.
On June 6 this year, Vatican News described Mincione’s management of Vatican investments as “speculative” and a “conflict of interest.” Later that month, Mincione, through two of his companies, filed lawsuits against the Secretariat of State and the holding company which controls the London building, and which he sold to the secretariat.
Earlier this month, Vatican prosecutors, working with Italian authorities, executed a search and seizure warrant against Mincione. Italian media reported that Mincione, accompanied by his lawyers, presented himself to police by prior arrangement, who seized electronic devices, including cellular phones and iPads.
Vatican action against Mincione was the latest development in a 18-month-long ongoing investigation into financial dealings by the Secretariat of State.
A series of raids by Vatican authorities, beginning in October last year, have resulted in the suspension of several serving and former employees at the secretariat, including Tirabassi, as well as Msgr. Alberto Perlasca, whose home and office were raided earlier this year.