The fund manager at the centre of an ill-fated investment by the Vatican in the London property market has filed a lawsuit against Credit Suisse over claims the Swiss bank did not disclose that the funds were from donations intended for the needy.
WRM Group, which was founded by former banker Raffaele Mincione, filed a claim in Luxembourg against Credit Suisse and fund administrator Citco this month. The suit alleges that Credit Suisse and Citco did not tell Mincione that investments made in his fund came from a unit of the Vatican that manages charitable donations, known as Peter’s Pence.
Mincione is facing criminal proceedings in the Vatican for his role in a deal in which Peter’s Pence assets were used to buy 60 Sloane Avenue, a building in the Knightsbridge district of London.
Credit Suisse said it “will defend itself vigorously against this claim brought by WRM Group, which is unfounded and without merit”. The bank added that it “is not involved in the Vatican trial”.
Last year, Vatican prosecutors charged Mincione with various crimes including fraud and embezzlement, allegations that he contests.
Companies connected to WRM acquired the London building in 2012 for £129mn. Two years later, money the Vatican said was from Peter’s Pence was used to buy a stake in the property via an investment fund founded by Mincione at a far higher valuation.
The Vatican acquired the rest of the building in 2018. Vatican prosecutors say companies founded by Mincione made a large profit from investing in the Knightsbridge building, which was formerly a Harrods warehouse and was earmarked to be developed into luxury apartments.
He and his companies have denied any wrongdoing, saying that the increase in the property’s value was justified by independent auditors and third-party consultants. He has also said the Vatican was always advised by its own investment banks, including Credit Suisse.
Senior Holy See officials invested on behalf of the Vatican a total of €350mn of donations in the London building between 2014 and 2018, the Vatican has said.
WRM said the impact of the Vatican’s criminal proceedings had resulted in Mincione having to abandon several large projects and having his assets frozen in Switzerland, as well as increasing his funding and financing costs.
“WRM Group alleges that Credit Suisse and Citco failed to divulge crucial information about the origin of the money used by the named defendants to subscribe in the WRM Group Sub-Fund, in order to cover up the exact origin of the said money in the framework of the relationship between the named defendants and the Vatican,” WRM said in a statement.
Citco did not respond to a request for comment by the time of publication.