The “vulture fund” JC Flowers is the one getting the most benefit out of millions in interest payments

The “vulture fund” JC Flowers is the one getting the most benefit out of millions in interest payments produced by nearly 250 million euros that have been blocked since March 2015 – later on deposited in Vall Banc –, affecting hundreds of investors as a result of the intervention to the no longer existing Banca Privada de Andorra (BPA). Afterwards considered a downright theft from the original shareholders.

The man behind the venture capital firm “JC Flowers” is J. Christopher Flowers, 60 years of age, known as “business pirate”, with a fortune that amounts to 1.170 million euros according to Forbes magazine. The firm has control over the greatest group of firms in the world which invests in financial institutions, most of them ailing banks, from Spain to Japan.

This entity has been focusing on the European periphery for years. Used to looking for profits where only bankruptcy and destruction exist, it saw in Andorra a great opportunity for business and acquired the assets of BPA for the bargain price of 29 million euros, when the actual value was more than 500 million euros.

JC Flowers was suspiciously chosen by the State Agency for Resolution of Banking Institutions of Andorra (AREB) to manage the assets of the extinct BPA. However, when it acquired the “good” funds from Vall Banc, it was penalized by the FinCEN for managing a bank involved in money laundering, in contrast to the BPA, where the Andorran authorities had no choice but to recognize the lawfulness of the great majority of the clients and financial transactions.

After acquiring the Saddle River Valley Bank, a small bank located in New Jersey in the United States, the “vulture fund” was penalized by the FinCEN for carrying out major monetary transactions with shady clients in Mexico and the Dominican Republic. In spite of this bad precedent, the AREB approved the buyer, not caring at all about the lack of ethics of this American company who owned a bank implicated in money laundering.

Although some analysts affirm that selling the bridge bank was a desperate measure in response to the Andorran government incompetence at handling the crisis to a large extent caused by itself and its lack of transparency.

Moreover, AREB’s affirmations turned out to be a complete farce, since none of the objectives established in the BPA’s resolution plan were met. Over three years from the illegal intervention and not the slightest attempt has been made to give back the funds to the rightful owners, who are legally supported and will not give up the fight to get their savings back. More than 110 penal and administrative complaints have been presented before the Andorran court.

Despite the actions taken by major shareholders, the brothers Ramon and Higini Cierco, against JC Flowers and the Andorran government to hold up the illegal bank expropriation process, it was biased from the start due to mishandling, kept in secret and devoid of accountability and rule of law.

From the very beginning, the Cierco brothers rejected this American fund and were sure that this was not the ideal solution to the problem. It had a doubtful investment history and the Spanish government had already rejected it in previous attempts to acquire a Spanish bank in weak financial position.

In other words, JC Flowers was never a serious or responsible alternative to solve this disaster, which until today, has been poorly handled by the Andorran government. In previous years, it had also faced its own financial restructuring problems, legal claims and reputational damages to its investors due to their funds being “exposed to unsuccessful deals”.

The regulating Andorran authority never revealed why they supported the expropriation of a successful and highly creditworthy financial institution over a more reasonable restructuring alternative to assess and eventually correct any weaknesses in the anti-money laundering control process.