The triad still bleeding out the Banking credibility of the Principality

Much has been written at a global level on the illegal intervention of BPA, analysing the form without seeing the merits of the case: a Machiavellian “conspiracy” between the president of the State Agency for Resolution of Banking Institutions (AREB), Albert Hinojosa, and the Andorran government through the Association of Banks of Andorra. They agreed to a line of credit so that the companies affected by the case, could continue operating after the blocking of their accounts and to ensure the day-to-day operation until the situation is resolved. This has not occurred during the last two years.

Thousands of foreign clients continue to denounce, that these entities continue to deliberately delaying the transfer of high net worth accounts, taking advantage of the new exchange of banking information that entered into force in January of this year. This caused many clients, in the face of the impotence and despair, to donate or abandon their funds, not to run the risk of serious reprisals by the tax authorities of their respective countries. To this uncertainty, which preoccupies the Spaniards, adds the fiscal exchange treaties signed between Spain and Andorra not long ago, and that will be implemented from 2018.

This triad is still bleeding out the Banking credibility of the Principality, which in two years has not been able to rebuild its reputation to, what it was, a large European financial centre; their lack of responsibility and ineptitude, could not prevent the crisis in which the banking entity is sunken from contaminating other financial sectors.

On the other hand, the American vulture fund J.C. Flowers, has not been able to convert Vall Banc into a benchmark entity in the financial sector. Their actions, which were always those of a hasty manner and without legal justification, gave rise to serious damages to their employees, clients and shareholders that involve violations of rights guaranteed by the law, and for which one may still seek compensation.

Many clients who granted their confidence to the bank, to take part of its normal services, became collateral victims; they were trapped along with the suspected clients when Andorra intervened the entity in March 2015. In addition, the disability and the malpractice by the minister Jordi Cinca, in the exercising of his functions as authority, generated social alarm and compromised the stability of the bank and the rest of the Andorran financial system.

The alleged intervention, liquidation and subsequent sale of BPA to a foreign company, in order to continue operating under another name and safeguard the savings of the clients and the jobs of the employees, was a farce. The majority continue to que in the offices of Vall Banc and living in a situation of uncertainty about their funds, which the government limited withdrawals of to 2 thousand 500 euros a week per account. Some of them had to take resort in family savings in other entities to face their expenses, such as paying the mortgage.

Although it was never detected that BPA publicly offered structures for money laundering amongst its list of services, as publicly acknowledged by César Goyache, CEO of AREB, agency created in the image of the Spanish FROB for managing the crisis.

It was AREB who approved the transfer to the new entity, Vall Banc, which was born the 11 of May of 2016 with 30 million of capital and other 70 million in contingent convertible bonds (known as coconuts, in the Spanish jargon), of the BPA assets that were out of suspicion. They also put in place illegal mechanisms to prevent a mass escape of clients, who were promised to get their money back gradually over a period of six months. This has not happened until this date, since the only thing that interested them was to keep the clients, to whom they never gave any guarantee, so that the bank would not suffer from a liquidity problem.

Although the transfer of the funds of almost 28 thousand clients became effective in only four days; other 923, mostly foreigners and with exceedingly high account balances, were kept blocked. In addition, these accounts in spite of being cleared of having any connection with the alleged money laundering, to this date they continue to face bureaucratic obstacles on the part of the Andorran Government.