Vatican reforms finances following London property scandal

Pope Francis has stripped the Vatican’s powerful central administration office of an investment portfolio worth hundreds of millions of euros following a scandal linked to luxury London real estate development in Chelsea.

The Vatican said that all of the financial assets of the Secretariat of State, the Holy See’s state bureaucracy, would be placed under the control of APSA, the Vatican’s existing centralised asset manager, from the start of the new year.

The announcement follows Pope Francis requesting the resignation of Cardinal Giovanni Angelo Becciu, who oversaw the investments of the Secretariat from 2011 to 2018, earlier this year amid an ongoing Vatican police investigation into how these funds were managed. Cardinal Becciu has denied any wrongdoing.

The Pope has requested the resignation of Cardinal Giovanni Angelo Becciu, who has denied any wrongdoing © Gregorio Borgia/AP

The Vatican also said that Pope Francis had ordered the Secretariat’s management of the so-called Peter’s Pence charitable donations made by Catholics around the world would now also be placed under the control of APSA.

The Financial Times has reported extensively on how hundreds of millions of assets held in Swiss bank accounts by the Secretariat were invested in assets, including a property development scheme in Chelsea, that the Vatican has said resulted in the Catholic Church suffering large losses.

Gianluigi Torzi, a London-based Italian businessman who acted for the Secretariat in its London property investments, was earlier this year arrested and charged by the Vatican with “extortion, embezzlement, aggravated fraud and self laundering”. Mr Torzi, who was later released from custody, denies any wrongdoing. 

Last month Italian financial police, acting on a request by the Vatican judicial authorities, executed a search and seizure warrant against a group of people linked to the Secretariat’s investments including a suspended Vatican official and Raffaele Mincione, a London-based fund manager who oversaw the Chelsea property development.

Mr Mincione, who denies any wrongdoing, said that he had “co-operated fully and beyond what was requested”, and that he was certain that the investigation would “confirm the lack of [his] involvement with respect to what may be envisaged by the authorities of the Holy See”.

Nunzio Galantino, president of APSA, said that the Secretariat’s investment in the London development scheme had directly influenced the decision to strip the office of its financial assets.

“The affair of the London property helped us to understand what control mechanisms needed to be strengthened,” he said in comments to the Vatican’s state news outlet. “It made us understand many things: not only how much we lost — an aspect that we are still evaluating — but also how and why we lost it”.

Mr Galantino also said that the Pope had long requested that there was a “more marked distinction” between the Peter’s Pence charity money managed by the Secretariat and other funds.

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