Here’s how Mps splashed with diamonds
The impact of the diamond case on MPS accounts, the intricate affair, the role of Bank of Italy and the Bertini case. Facts and insights
After almost ten years, the affair of diamonds purchased at inflated prices by customers of various local banks continues to produce unpleasant effects. The latest discovery is that Montepaschi, in recent years already in great difficulty due to the aftermath of the Alexandria and Santorini operations, has losses of almost 250 million euros in its balance sheet thanks to the refreshments made so far, more than 99% of those requested. But let's take a step back.
THE INCRIMINATED EVENT
The story of investment diamonds sold to bank branches at inflated prices started with the reports of the Milan Public Prosecutor's Office, ended in 2021 (in 2017 the Antitrust intervened with a fine) and led to the request for indictment of 105 people and five companies, including four banks (Banco Bpm, Banca Aletti, Unicredit and Montepaschi), plus the intermediary International Diamond Business. Two other companies under investigation, Intesa Sanpaolo and the other intermediary Diamond Private Investment, have instead requested a plea bargain, already obtaining the favorable opinion of the prosecutor.
The magistrates hypothesized, for various reasons, the crimes of fraud, self-laundering, money laundering, corruption between private individuals and, in one case, obstacle to the supervisory authority. To put it briefly, customers who had invested in precious stones, with bank branch purchases, found themselves in hand with diamonds which were then worth an average of 30% of what they had paid on the market.
Carlo Bertini , an official of the Bank of Italy, also lost out in this story, accusing Via Nazionale of failing to supervise the television show "Report". Bertini was first demoted and then sanctioned by the central bank with suspension from service and salary for twelve months. A sanction that later turned into dismissal, challenged by the official who was right by the Lazio TAR two months ago. At the moment, however, Bertini has not yet been reinstated.
THE INTERVENTION OF THE ANTITRUST AND THE INVESTIGATION OF THE COMMISSION OF INQUIRY ON THE BANKING AND FINANCIAL SYSTEM
As mentioned, the Competition and Market Authority also dealt with the matter, which in October 2017, then led by Giovanni Pitruzzella, sanctioned credit institutions and vendor companies for over 15 million euros.
Just over a year ago, in March 2022, the Antitrust was heard by the parliamentary commission of inquiry into the banking and financial system, chaired by Carla Ruocco (M5S) in the last legislature.
In February, however, it was the Bank of Italy who held the court, which during the hearing highlighted the fact that "the activity of notifying customers of the possibility of purchasing diamonds from third-party companies at their branches does not constitute, according to the law, neither a banking or financial activity, nor an investment service".
During the AGCM hearing, the head of the cabinet, Maria Tuccillo, recalled that the investigation in Piazza Verdi had revealed that the sale of diamonds through the banking channel was configured as an activity "connected to banking". In addition, there were "unfair commercial practices and lack of transparency on the nature of the assets (proposed as investment diamonds) and on the actual prices as well as on the liquidity of the asset acquired". And again: "As regards the credit institutions in particular – he continued – the Authority has ascertained their participation in the offense, having contributed with their behavior, as co-authors, to the commission of the infringement and having they played an 'active role' – not a mere signaling one – in the overall contractual dynamics in which the consumer was involved and in the various phases of the purchase”.
LOSSES IN THE MPS FINANCIAL STATEMENT
Returning to current events, as stated in the first quarter of the year, up to March 2023 more than 12,000 requests for refreshments had arrived in Siena "for a total equivalent value of around 317 million euro, while the concluded procedures totaled around 316.3 million euros" of which "approximately 0.26 million in the first three months of 2023, hedged for the equivalent value net of the market value of the stones by the provision for risks and charges set aside in previous years".
The refreshments carried out so far "represent 99.7% of the total volume of diamond offer reports by the Parent Company". The document highlights that "funds for residual risks and charges recognized against the refreshment initiative amounted to 4.2 million euro at the end of March 2023". If these are the numbers of requests and refreshments, there is something out of place: the value of the precious stones entered in the balance sheet (as of last March 31) is 68.6 million euros.
Figures that have not gone unnoticed even by Nicola Borzi, ex Sole 24 Ore (he was a whistleblower like Bertini) and now a journalist of the daily Fatto who has been following this story for years. “@Carlo Bertini see why you were unjustly torn apart (and still continue to be persecuted) by #BancaItalia for reporting to #Report #Rai3 what your superiors did not want to know about the #diamonds sold through #Mps ?” writes on Twitter. Borzi, as he did in the past, accuses Via Nazionale "that according to the papers he knew the situation for years and did nothing until the scandal erupted" and recalled that "even the criminal investigation in Milan was dismembered". One last “thought” to his former newspaper, from which he came out in strong controversy: “Today #IlSole24Ore succeeds in the ridiculous and shameful masterpiece of giving a positive title to that wormy scandal. They openly write that those diamonds that the bank has repurchased from customers to avoid criminal charges are worth much less than the repurchase price, creating a capital loss of the same amount for the bank: 250 million hole. That's the value for which your and your family's life was torn apart.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/mps-diamanti/ on Sun, 04 Jun 2023 15:13:17 +0000.