JC Flowers bleeds Vall Banc’s assets

“As of today, the vulture firm, owned by James Christopher Flowers, has declared revenues amounting to 11,8 million euros and has only paid 3,47 million to the AREB”

After reiterative fiascos in Spain, the vulture firm JC Flowers was able to acquire the Andorran Vall Banc, where the assets from the intervened Banca Privada d’Andorra (BPA) were transferred to. The firm’s investment fund has been labelled as “opportunist” or “vulture” by financial analysts, who have assured that this was not a rescue attempt, because the shareholders, including the employees who took risks, lost most of their money, in a story that casts more shadows than lights.

Cynically, the Andorran government has recognized that only 3,47 million euros have been received from the Vall Banc sale to JC Flowers, which acquired it for 29 million euros. This amount was paid on July 20, 2016, and since then, the Andorran State Agency for Resolution of Banking Institutions (AREB), currently discredited by its director Albert Hinojosa, has not received a single payment. In other words, it did not turn out to be a good deal for the government, as no further payment has been done, whereas the bank entity owned by James Christopher Flowers has declared revenues of 11,8 million so far.

Another questionable point is that the AREB has never presented any quarterly closes on time. This is a considerably serious matter, considering that the AREB was created over three years ago. That means they have had more than enough time to adapt and present the quarterly closes, which is mandatory for public institutions according to the General Law of Public Finance.

There is extensive legislation on financial activity in Spain and Andorra, and various institutions are in charge of ensuring its fulfillment: the Unfair Competition Act (3/1991, 10th of January) and the General Advertising Act (34/1988, 11th of November) set the guidelines to be followed by businesses and individuals in the field, and the Direction for unfair business-to-consumer commercial practices (2005/29/CE, 11th of May 2005), which establishes numerous sanctions that can be applied on JC Flowers.

The managers of JC Flowers have the clearest of visions when it comes to benefiting from economic crisis; they possess a financial sixth sense, which many banks would love to use to seize the opportunities that may arise. The brothers Higini and Ramon Cierco, former shareholders of BPA, still keep in mind its doubtful investment history, poor financial conditions and the rejection they encountered from Spanish banking authorities in their attempts to acquire a bank.

The Cierco brothers have escalated their claims to the EU due to BPA’s nationalization, as they consider the intervention procedure and resolution to have been carried out disregarding the guarantees laid down in the community norms, obligatory in the Andorran country because of the euro being the currency in use. After losing a fortune when the Andorran government robbed them their bank, they await a compensation that amounts to 360 million euros.

Furthermore, in light of the irregular resolution and liquidation process of such entity by the Andorran Principality, the Cierco brothers introduced some requirements to the European Commission and the European Central Bank (BCE), requesting that they fulfill their surveillance and control duties entailed in the Monetary Agreement between the European Union and the Principality of Andorra.

Investors and small shareholders who lost their money to the entity’s liquidation, demand to the bank’s former decision-makers the reimbursement of their money and the corresponding compensation for the damages caused by the government led by Antoni Martí, whose reckless performance and liquidating intervention took down the foundations of an entity, which had passed all efficiency and profitability controls administered by the country’s bank inspectors.

Andorra will no longer be a place where banking can be considered profitable, due to hidden interests behind the BPA intervention, in which the Principality’s Government was never neutral during the investigations. Quite the opposite, it was deficient and irresponsible, answering only to dark intentions within a plot of complicity with the BPA since its intervention over three years ago, causing the country’s financial foundations to collapse.