The Administration of the Patrimony of the Apostolic See (APSA) has sold the now-famous building at 60 Sloane Avenue in London for 186 million pounds sterling (roughly $224 million) to the American company Bain Capital, the Holy See Press Office announced on July 1, 2022. This property, acquired by the Secretariat of State in 2014, is at the heart of a financial scandal for which ten people, including a cardinal, Angelo Becciu, are currently being prosecuted by the Vatican justice.
The sale was announced on January 28, but the sum agreed between the two parties had remained secret and only 10% of it had been paid. The conclusion of the transaction had been announced previously for June.
The Holy See explains that the entire transaction was monitored by the Secretariat for the Economy, which now has a supervisory role over the entire economic apparatus of the small state.
Transparency and independence
To evaluate the transaction, the secretariat announced that it had launched a call for proposals in January 2021 to select the person in charge of ‘due diligence’, i.e. the organization of the sale. The process resulted in the choice, among 16 offers, of the British real estate broker Savills.
The Holy See presented this process as a guarantee of “transparency” and “independence” for the operation, a way of distinguishing itself from the secrecy and accusations of fraud that have plagued the previous transactions concluded by the Holy See to acquire the building. The trial currently underway focuses on the conditions in which the due diligence conducted by the Italian-British brokers Raffaele Mincione and Gianluigi Torzi were carried out in 2013 and 2019.
In its statement, the Holy See also takes care, as it has done since 2020, to emphasize that the losses incurred in the financial operation have not affected the funds for St. Peter’s Pence. The latter, called ‘Obolus’, collects the money paid each year by the faithful to help the pope in his mission.
Controlled until December 2020 by the Secretariat of State (subsequently transferred to APSA), the fund was used to purchase the Sloane Avenue building, the former headquarters of Harrod’s. The losses have been transferred to the Secretary of State’s reserve fund, APSA says.
Losses difficult to calculate at this time
The losses of the Holy See in the operation are difficult to assess, although it is known that the first investment of the Holy See made to acquire this property was 200 million dollars. It would have been followed by other investments later, not communicated at the moment by the Holy See, as well as by the payment of 15 million euros to finance a takeover operation led by the broker Gianluigi Torzi in 2019.
At the eighth hearing of the trial of the London building in February 2022, the civil parties – the Holy See – estimated the losses at 217 million euros ($226 million in USD). This loss is a significant increase compared to the first estimates, which a year earlier estimated the losses at 76 and 166 million euros.
The Financial Times, in November 2021, mentioned for its part losses of around 115 million euros in case of sale at 230 million euros. This sum reaches 132 million euros if one relates it to the real sale price of the building announced today.
For his part, the businessman Raffaele Mincione, questioned on June 7 during the trial, stated that, according to his plans, the sale should have been carried out at around 350 million pounds sterling ($423 million USD) after an additional investment of 115 million euros to redevelop the building. The sale, under these conditions, would have allowed the Holy See to make a real capital gain.