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Vatican lost €17 million through Malta fund under MFSA’s spotlight

Vatican Bank announces civil action over investments in Malta carried in the Optimum Ad Maoira fund

Matthew Vella
10 October 2017, 6:44pm
The Vatican Bank has announced it is opening procedures in court in Malta to seek damages over investments made in 2013
The Vatican Bank has announced it is opening procedures in court in Malta to seek damages over investments made in 2013
The Vatican Bank has announced it is opening procedures in court in Malta to seek damages over €17 million in investments made in 2013.

The investment fund in question is the Optimum Ad Maoira fund in Luxembourg, where money was reportedly invested through the Malta-based fund Futura Funds, which is run by Italian banker Alberto Matta.

Futura has held an investment licence from the Malta Financial Services Authority since 2011, but its request to upgrade to a full alternative investment fund manager (AIFM) was frozen by the MFSA.

The freeze, which has prevented Futura from managing funds above €100 million, came on the heels of its involvement in a scandal over share values at the Italian Bank of Vicenza.

The bank was suspected of having pumped the value of its shares for years, and after the European Central Bank forced it to reduce their value, many retail clients lost millions of euros in savings.

Additionally, investigations in Italy are still ongoing into the investments made by the Optimum group in Italian construction firm Maiora, and the role of Malta-based Futura Funds Sicav in the investment of these assets, which it also manages.

In 2014 Cardinal George Pell, Prefect of the Secretariat for the Economy, made an indirect mention of the wrong investments and losses linked to the “Ad Maiora” fund. The investment was established by the former management of the IOR.

The new management, after the arrival of President Ernst von Freyberg, decided in 2013 to pull out, judging the type of investment too risky. The cost of the reclamation operation, was included in the 2013 annual report, under “net trading income”, which showed a loss of €16.5 million.  

On Tuesday the Vatican issued a statement saying: “In the last few days, the Institute for the Works of Religion (IOR) started a civil action before the competent Maltese judicial authorities against various third parties deemed liable of having caused significant damages to IOR in connection with certain investment transactions in which it participated.”

The Institute for the Works of Religion is commonly called the Vatican Bank.

Over the years the IOR has been involved in numerous controversies, most famously its involvement with the Banco Ambrosiano, which collapsed in 1982 after accusations of fraudulent deals involving the IOR.

The chairman of the bank, Roberto Calvi, fled Italy after the scandal came to light, and was later found hanging from Blackfriars Bridge in London. Although his death was at first ruled a suicide, a coroner later said the case was “open.”

The day before his body was found, his personal secretary, Graziella Corrocher, killed herself by jumping out of a window at the Banco Ambrosiano’s headquarters in Milan, leaving a note blaming Calvi for the bank’s misfortunes.

Pope John Paul II instituted a reform of the institution’s governing structure in 1990, but scandals continued.

In 2010, Pope Benedict XVI created the Financial Information Authority, to act as a financial watchdog unit for the Vatican.

Matthew Vella is executive editor at MaltaToday.
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