The Vatican says it has completed the sale of the luxury London building at the center of an ongoing corruption trial – after suffering a hit estimated to cost around £120m (€140m).
In a statement on Friday, the Vatican said the building had been sold for £186 million to Boston-based private investment firm Bain Capital.
However, the Vatican did not provide a definitive figure for the losses it suffered in the process.
A person familiar with the various deals over the years said they amounted to just over £120m (€140m).
The statement said the losses were covered by the Vatican’s reserve funds and pointed out that donations from the faithful to a papal fund known as Peter’s Pence had not been used.
The sale of the building, located on Sloane Avenue in Chelsea, marks a turning point in the Vatican’s botched investment strategies.
It comes as a fraud trial reaches its first anniversary later this month, which is expected to last at least a year.
Vatican prosecutors accused 10 people, including former Vatican official Fabrizio Tirabassi, of robbing the Holy See of tens of millions of euros, and Italian broker Gianluigi Torzi of then extorting 15 million from the Vatican euros (£12.8m) to secure full ownership of the property. They deny all wrongdoing.
In May, Tirabassi said he was under intense ‘psychological pressure’ to finalize a deal over the Holy See’s troubled investment in the London property, but entered negotiations without a lawyer and failed to realize the deal yielded nothing to the Vatican in return.
Testifying for seven hours, he revealed the Holy See believed it would salvage its investment in the former Harrod warehouse and stem its losses.
The real estate adventure began in 2014, when the Vatican Secretariat of State invested 300 million pounds sterling (350 million euros) with the Italian broker Raffaele Mincione.
But an indictment shows that in 2018 the Vatican thought he was being robbed by Mincione and instead turned to another Italian broker, Torzi, to back out of the first deal.
Torzi was accused by prosecutors of duping the Vatican and trying to gain control of the building by taking the voting shares to himself.
The Vatican then gave Torzi £12.9m (€15m) to walk out of the deal with him.
Tirabassi was number two in the administrative office of the Secretary of State, which managed £511 million (€600 million) in assets, including donations from the faithful to Pope Francis for charitable purposes.
From around 2012, the office decided to diversify its portfolio and put £170m (€200m) into a fund which, among other things, invested in the London warehouse and turned it into a property. luxury residential.
Pope Francis stripped the Secretary of State of control of its own investment funds over the embarrassing deal, and also instituted a committee to oversee the ethics of its investments.
After coming into effect with the Vatican’s new constitution earlier this month, the committee is headed by an Irish-American cardinal but includes four outside lay financial experts from Britain, Germany, Norway and the United States.