The Sacking of Afinsa 14.12.12

Views:
 
     
 

Presentation Description

The Sacking of Afinsa 14.12.12 Canal Afinsa

Comments

Presentation Transcript

The Sacking of Afinsa :

1 The Sacking of Afinsa A Government Run Amok!

The Sacking of Afinsa:

2 The Sacking of Afinsa Dear Sir: My name is Maria de los Milagros (Mila) Hernán Alvarez. I am a client of Afinsa Bienes Tangibles, S.A. of Madrid, Spain. I have no relationship to Afinsa except as a client and therefore interested observer of the debacle that has taken place. I write this piece in the hope that the international press will take notice of the nightmare that began almost seven years ago as a result of what I believe was a coordinated effort to destroy Afinsa and harm the company´s exclusive supplier of philatelic collectibles, formerly known as Escala Group, now Spectrum Group International.

The Sacking of Afinsa (cont.):

3 The Sacking of Afinsa (cont.) The Spanish press is muzzled. Nobody takes care of us. Given the continued silence of the media, we are compelled to send this piece to the foreign media to give an international dimension to the scandal of political intervention that has brought ruin to more than 190,000 people. When we intend to solve an enigma, whatever its nature is, it involves following certain steps to help us in understanding the problem. If the mystery has to do with fait accompli, we can start by asking ourselves some questions, which are certainly basic, such as: Why was it done?, How was it done?, Who did it?

The Sacking of Afinsa (cont.):

4 The Sacking of Afinsa (cont.) When the plan is truly Machiavellian, one is forced to ask a fourth question: Who benefits from what was done? Seven years of gathering data, analysing the facts and contrasting research, led me to the 'why' and 'how' the looting of thousands of people has been conducted. With regard to the "Who launched the machinery to carry it out?" and to the "Who could benefit?" let it be the readers who, in the light of the data provided, reach their own conclusions.

The Sacking of Afinsa (cont.):

5 The Sacking of Afinsa (cont.) The intervention of Afinsa is an “enigma”. The reader is entitled to know that, if not for the dramatic events of May 9, 2006 the reality of the most important philatelic and collectibles organisation in the world (Europe, America, Asia), in existence for 26 years and with a global turnover of €4.000.000.000 (600.000.000 euro turnover in Spain), would, to this day, be very different. Delving into assumptions becomes necessary to try to understand, in a first approximation, what could be the real reasons which prompted the intervention and shut down of this Company.

The Sacking of Afinsa (cont.):

6 The Sacking of Afinsa (cont.) Afinsa would continue living and operating in a highly specialised sector: that of investments in tangible and collectible goods, and, without any doubt, holding a dominant position. Had the company accepted the offer made by Citigroup to go out onto the Stock Exchange thanks to the impressive estimated market capitalization of this operation , AFINSA would have consolidated its position, already among the 50 most important Spanish Companies; even ahead of RENFE. (Spanish Railway Company)

The Sacking of Afinsa (cont.):

7 The Sacking of Afinsa (cont.) As was contemplated in the strategic plan designed for the period 2006-2011, the AFINSA group would have entered fully into the powerful Asian investment market through the two giants with whom Afinsa already had trading relations: China and India.

The Sacking of Afinsa (cont.):

8 The Sacking of Afinsa (cont.) Through its American subsidiary Escala Group’s A-Mark Precious Metals, Inc., was purchased in June 2005. A-Mark’s had been formally authorised by the selective U. S. Mint (United States Currency House) to carry out the sale of gold, precious metals and gold bullion investment (bullion) and in 2005 was responsible for 50% of the U.S. Mints´ bullion sales. A-Mark alone had total sales of $2.5 Billion (U.S.) in 2005 and over $7.5 Billion (U.S.) in 2012. In addition to A-Mark, AFINSA had interest in over 20 companies of which a number were subsidiaries of the Escala Group.

The Sacking of Afinsa (cont.):

9 The Sacking of Afinsa (cont.) This strategic purchase would have enabled the multinational group that Afinsa was, to comfortably overcome the financial turmoil and genuine threat to Spanish banks already appearing on the horizon. It would have become an interesting alternative to providing its clients with the possibility of investing in a tangible asset: gold and other enormously attractive products for investors: diamonds, Platinum, and precious metals in general, whose security, upside trading and revaluation are unparalleled.

The Sacking of Afinsa (cont.):

10 The Sacking of Afinsa (cont.) Add to the above the value of an excellent commercial network, consisting of more than three thousand employees and advisers, and a portfolio of one hundred and ninety thousand satisfied clients as main assets of the company, and we will arrive at the conclusion, without fear of being mistaken, that the growth and benefits of Afinsa in time would have resulted in the continued growth and success of a multi-national group as envisioned in Citigroup´s IPO proposal.

The Sacking of Afinsa (cont.):

11 The Sacking of Afinsa (cont.) But all this or, better said, perhaps because of all this, the great project of what might have been this holding company was truncated that fateful Tuesday the 9th of May 2006, date in which the intervention of the Company, under the accusation of carrying out a monumental fraud through a sophisticated system of "pyramid or Ponzi scam", took place.

The Sacking of Afinsa (cont.):

12 The Sacking of Afinsa (cont.) Most of society thinks that the measure proved successful because it was due to a reasonable prudent criteria, in order to avoid a greater evil; i.e., that the alleged scam could continue capturing more unwary people. But there are also those who have no doubt in openly stating that the intervention was due to an unfortunate political decision of the Socialist Government of José Luis Rodríguez Zapatero after succumbing to the pressures of the Almighty financial sector, which saw one of its biggest competitors in Afinsa.

The Sacking of Afinsa (cont.):

13 The Sacking of Afinsa (cont.) It might be argued that I must not comment on which of the two versions is correct, since the "Afinsa case" instruction is continuing and Justice after almost seven years of waiting has not issued any ruling on the matter, but the truth is that, as we will see later, in regards to the intervention of this company, there are more "shadows" than "lights".

The Sacking of Afinsa (cont.):

14 The Sacking of Afinsa (cont.) Despite the time elapsed, numerous questions remain open. There are many questions that those of us affected ask, for which, to date, we have no judicial answer. What has been demonstrated is that the so-called “Atrio operation", as it is known in legal and police areas, could only take off – due to its magnitude - by direct order, or at least with the knowledge of the Government of José Luis Rodríguez Zapatero. The way it developed could only end up in the destruction of two Companies: Afinsa and Forum Filatélico.

The Sacking of Afinsa (cont.):

15 The Sacking of Afinsa (cont.) Both Companies had exercised - over 25 years in the first case and 26 years in the second case – a dominant position in the tangible and collectibles investment sector. In the case that concerns us, the Afinsa group had reached a development dimension of an international holding. Today, none of the two Companies exist. As a result of the intervention, both of them are being liquidated.

The Sacking of Afinsa (cont.):

16 The Sacking of Afinsa (cont.) What follows is the simplified history, based on pure facts, of an intervention that is unjustified in both manner and grounds. From the day of the shutdown in May 2006, the socialist government, with mass media support, spread the now questioned accusation that Afinsa was involved in a pyramid or Ponzi scheme.

The Sacking of Afinsa (cont.):

17 The Sacking of Afinsa (cont.) The prosecution, a body created by Felipe González, a president whose government was involved at that time in many corruption scandals itself, presented charges accusing Afinsa of fraud, tax evasion, money laundering, bankruptcy involving criminal negligence or malpractice, breach of trust and misrepresentation in private document.

The Sacking of Afinsa (cont.):

18 The Sacking of Afinsa (cont.) Almost seven years later, we are not aware of any evidence uncovered which shows that any of the accusations are true despite the fact that the government has had complete access to all of AFINSA’s files and papers. Afinsa was legal, as much as were the contracts signed with its clients. Many of these accusations are based on an inspector in the Inland Revenue´s, conclusion that Afinsa was a financial business and not a mercantile one. The inspector´s name is Ms. Maria Teresa Yábar Sterling.

The Sacking of Afinsa (cont.):

19 The Sacking of Afinsa (cont.) These are some plain facts that public opinion does not know: 1.- On 9th May 2006, the first to arrive at Afinsa´s main offices was the media followed later, by a team of 300 riot police with machine guns, dogs, and armoured cars. It looked as if they were going to deactivate the largest terrorist cell that had ever existed in Spain. 2.- The anti-terrorist law is applied to the directors, which implied they were held incommunicado for 72 hours.

The Sacking of Afinsa (cont.):

20 The Sacking of Afinsa (cont.) 3.- Infringing the right established in the Spanish Constitution, which states that all Spaniards are innocent until proven guilty, and the right that guarantees personal honour, the media followed the example of the Minister of Interior, Mr. Rubalcaba, who in his May 9th, 2006 early morning press conference, declared Afinsa´s and Forum´s directors guilty of Spain´s biggest fraud. It was not until three days later that some television stations and newspapers started using the word “alleged”. Now approaching seven years later, not one AFINSA´s executives has been convicted of wrongdoing or gone to trial.

The Sacking of Afinsa (cont.):

21 The Sacking of Afinsa (cont.) 4.- The Tax Inspector Maria Teresa Yabar Sterling, contradicting four reports, declared Afinsa´s activity was financial. But she accepted in her declaration before the judge that if it were considered mercantile, Afinsa would be up-to-date in all its payments. The company would be solvent with substantial equity and not bankrupt as she alleged. It is a case of “imaginative interpretation” by one inspector of the Inland Revenue Service (Agencia Tributaria), as she herself declared before the judge, who believes that the juridical nature of these companies should be that of financial entities and not mercantile entities.

The Sacking of Afinsa (cont.):

22 The Sacking of Afinsa (cont.) 5.- Months before the 9th of May -when the police raided the company- the Ministry of Health and Consumer Affairs created a brochure encouraging people to invest in Afinsa and Forum and describing the activity as a mercantile activity. 6.- Furthermore, after May 9th when the company was put into receivership, (Minister for Health and Consumer Affairs), Elena Salgado, and the Minister of the Treasury, Mr. Solbes, confirmed repeatedly that the activity is a mercantile –and not financial- activity.

The Sacking of Afinsa (cont.):

23 The Sacking of Afinsa (cont.) 7.- The law in force at that time, 35/2003, sat down in the Fourth Additional Provision that entities engaged in the purchase of stamps could not categorise themselves as financial. Section 3 of article 9 of the Spanish Constitution states: The Constitution guarantees the principle of legality, the regulatory hierarchy; the publicity of the rules; that unfavourable or restrictive sanctioning provisions on individual rights cannot be retroactive, the certainty of law, responsibility, and the prohibition of arbitrariness by the authorities. Further, article 25 section 1 states that nobody can be convicted or sanctioned for actions or omissions that at the time they occurred did not constitute a crime, misdemeanour or administrative violation according to the legislation in force at that time.

The Sacking of Afinsa (cont.):

24 The Sacking of Afinsa (cont.) 8.- An irrefutable proof of the mercantile definition of the activity of Afinsa is that up until the 8th of May 2006, the tax authorities had charged VAT and other taxes corresponding to mercantile companies. What is more, the tax authorities had inspected the Company Tax, VAT, individual income tax, and the tax on returns from moveable capital from 1991 to 1994

The Sacking of Afinsa (cont.):

25 The Sacking of Afinsa (cont.) 9.- An internal document from the PSOE , the socialist party governing Spain at that time, states that, among other reasons, the intervention´s aim was to damage the political party called Partido Popular (PP), currently in power.

The Sacking of Afinsa (cont.):

26 The Sacking of Afinsa (cont.) 10.- Once the company had been placed under guardianship, the directors were removed from their positions and a receiver was appointed by the court, Mr. Grávalos, who happened to work for the Inland Revenue Service (Agencia Tributaria) (that is, the accusing party), and was supposed to determine the financial shortfall.

The Sacking of Afinsa (cont.):

27 The Sacking of Afinsa (cont.) When the police raid took place it was said that the police expected to find no stamps at AFINSA’s offices as this would be normal in any “Ponzi Scheme” to not find the valuables. Instead, the police found 150.000.000 stamps (over 200 tons weight), and as was later confirmed any clients who had left stamps with AFINSA for safekeeping did, in fact, have their portfolio intact in the vaults.

The Sacking of Afinsa (cont.):

28 The Sacking of Afinsa (cont.) 11.- Two months later, Mr. Grávalos valued the stamps. Afinsa, according to the records, had a surplus of €400 million, but Mr. Grávalos a day later, retracted this valuation with the excuse that the international catalogues (some of which have been in the business for more than 100 years) were not reliable. Months later we discovered that pressure was exerted on him from a judge who is now out of the judicial body, condemned for corruption: Baltasar Garzón. After Grávalos retracted, the prosecution demanded that the stamps be valued.

The Sacking of Afinsa (cont.):

29 The Sacking of Afinsa (cont.) 12.- In order to determine the value of the stamps, some “experts” were hired. But in spite of the law, which clearly states that they have to be completely independent, three of these so called experts (Mr. Pablo Cuadra Cid (who had been fired by Afinsa for bad practices), Mr. Fernando Jimeno de la Torre and Mr. José Jaime Martínez Millán), had all in the past a relationship with the company. 13.- By some sort of magic the new stamp valuation came in at 10% of the Grávalos evaluation.

The Sacking of Afinsa (cont.):

30 The Sacking of Afinsa (cont.) Mr. Grávalos´ second evaluation valued the real estate at purchasing price ( as if prices in Spain had not gone up in the last years), the Escala shares at post May 9th value, and the stamps close to nothing. He stated that the company had a debt of €1.700.999.000,00 and, therefore, accepted the declaration of bankruptcy.

The Sacking of Afinsa (cont.):

31 The Sacking of Afinsa (cont.) 14.- On May 8th Afinsa´s bank accounts contained €182.000.000.00. The true equity of AFINSA on the day prior to the raid, including real estate, art collections, shares in ESCALA etc. totalled 1.2 billion euros. AFINSA was therefore far from being bankrupt and, in fact, had assets and equity that were enough for any normal business for years to come.

The Sacking of Afinsa (cont.):

32 The Sacking of Afinsa (cont.) 15.- From the day on which the company was placed into administration, the receiver (or judicial administrator) appointed by the court, Mr. Grávalos, an employee of the tax authorities, stopped paying the Inland Revenue Service (Agencia Tributaria), although there was plenty of money in the UBS bank account in Spain thus, very conveniently, converting the I.R. into a creditor.

The Sacking of Afinsa (cont.):

33 The Sacking of Afinsa (cont.) 16.- Once the Bankruptcy was accepted by the courts, three new administrators were appointed. One of whom belonged to the Inland revenue because by now the Agency, thanks to Mr. Grávalos, an employee of the agency who had deliberately refrained from paying due taxes, had been made into a creditor.

The Sacking of Afinsa (cont.):

34 The Sacking of Afinsa (cont.) 17.-The bankruptcy Law (Ley Concursal) states that the aim of the three Bankruptcy Administrators should be that of resurrecting the company and that liquidation should only be contemplated as the last resource. In spite of this, the administrators have closed down some filial companies, suffocating others so that they are not prosperous, and incurring unnecessary expenses such as keeping many offices closed but paying the rents.

The Sacking of Afinsa (cont.):

35 The Sacking of Afinsa (cont.) 18.- On May 10th, 2006 a major Madrid law firm representing 3 children who had invested a total of 750 euros only two months prior, presented to the Court in Madrid an Involuntary Bankruptcy petition, seeking to have AFINSA declared bankrupt based on AFINSA being a financial, not mercantile type of company. The Judge accepted this petition and put AFINSA into bankruptcy thus ensuring the destruction of the world’s largest market maker of philately.

The Sacking of Afinsa (cont.):

36 The Sacking of Afinsa (cont.) The lawyers who requested the “necessary bankruptcy” of Afinsa were from the Osorio & Asociados firm, and represented three children who allegedly filed their suit the day following the police intervention. These children were new clients who had signed the contract to purchase just two months before, Afinsa had committed to sell, or failing that, to purchase their stamps, only once the contract would terminate. By contract, these children were not creditors.

The Sacking of Afinsa (cont.):

37 The Sacking of Afinsa (cont.) 19.- The legal nature of this type of companies, according to the law in force, is that of mercantile companies . If their legal nature should be that of financial entities, and not mercantile entities, it is not a sufficient argument to justify bankrupting two companies. In any case, it is Congress who has to modify the regulations governing this type of companies and then provide a period for adaptation to the new legislations.

The Sacking of Afinsa (cont.):

38 The Sacking of Afinsa (cont.) These are some of the questions we clients ask: 1.- Why, first thing in the morning on May 9th, did Mr. Rubalcaba, who had been recently appointed Minister of Interior, give information in his press conference about the imminent police action characterising as uncovering what was going to be the biggest fraud?

The Sacking of Afinsa (cont.):

39 The Sacking of Afinsa (cont.) 2.- What is the bankruptcy of Afinsa all about? Has the Banco de Santander been placed in receivership because its main director has had legal problems? Have companies that were or are currently in debt to the tax authorities been placed on receivership? 3.- Who benefits from the intervention called “ Operación Atrio”? Is it the banks?

The Sacking of Afinsa (cont.):

40 The Sacking of Afinsa (cont.) Would this be the reason the Banco de Santander and other banks had forgiven millions of euros the PSOE owed them, just a few months before the intervention?

The Sacking of Afinsa (cont.):

41 The Sacking of Afinsa (cont.) 4.- Can the PSOE and the Popular Party demonstrate that our democracy and fundamental rights do not suffer with these debts being written off illegally? 5.- A couple of months before the fateful day of May 9th, 2006 day, Mr. Botin from Banco de Santander, condoned the PSOE €167 millions. Is it true that during that time, Mr. Botin and Mr. Rubalcaba were repeatedly and uncharacteristically seen visiting a hotel in Valladolid called Atrio?

The Sacking of Afinsa (cont.):

42 The Sacking of Afinsa (cont.) 6.- Mr. Pedro Solbes and Mr. Alfredo Pérez Rubalcaba worked in Mr. Felipe González´s government when his PSOE government decided to pass a Decreto Ley (special law) allowing it to take over, overnight, the private company called Rumasa and place Mr. Ruiz Mateos in prison. This was followed by the Banesto Bank case … Is this just pure coincidence or rehearsed premeditation?

The Sacking of Afinsa (cont.):

43 The Sacking of Afinsa (cont.) 7.- How can it be that the receiver appointed by the court in charge of estimating the economic situation of Afinsa, works for the tax authorities, the accusing party? What was done to guarantee the impartiality and objectivity of this gentleman? 8.- Why, 78 months after the intervention, is the sub judiciary rule still applied, and why does the judge continue to not announce a decision? Would it be that they have no proof to substantiate the accusations?

The Sacking of Afinsa (cont.):

44 The Sacking of Afinsa (cont.) 9.- How is it possible that a company that was, at the date of the police intervention, up to date with all its payments can be forced into bankruptcy proceedings without having demonstrated its “malpractice” or any of the accusations? 10.- How is it that a company that was, at the date of the police intervention, up to date with all its payments be closed down just because an Inland Revenue inspector decides to apply her personal criteria and declare the activity financial?

The Sacking of Afinsa (cont.):

45 The Sacking of Afinsa (cont.) 11.- How is it that the judge names as judicial administrator an inspector of the same Inland Revenue so that he assesses the company value? Why did he not accept the allegations against this clearly unjust decision?

The Sacking of Afinsa (cont.):

46 The Sacking of Afinsa (cont.) 12.- How is it that one of the administrators who by law is charged with the responsibility if at all possible of resurrecting the company rather focuses on liquidating it? This administrator belonged to the Inland Revenue who was not owed any money from AFINSA. On the contrary, The Inland Revenue would have to return millions of paid taxes to Afinsa if the company would be considered financial? 13.-How is it that the valuation of the company´s assets done by the three Bankruptcy Administrators is so ridiculously low?

The Sacking of Afinsa (cont.):

47 The Sacking of Afinsa (cont.) 14.- How is it that after several sentences from the Higher Court (Tribunal Supremo), and the Civil Court (Audiencia Provincial), among others, certifying that Afinsa is mercantile, that the contracts were perfectly legal, that there is no financial activity whatsoever, the Company is still on liquidation and the sub judiciary rule is still applied?

The Sacking of Afinsa (cont.):

48 The Sacking of Afinsa (cont.) 15.- As noted earlier, Madoff, Ponzi and others didn’t bother to actually hold real shares or tangible assets on behalf of their clients. AFINSA actually held on behalf of or gave clients their portfolios of stamps. The Mercantile Contracts of AFINSA allowed the client to sell their portfolio privately or have AFINSA purchase it over a period of time.

The Sacking of Afinsa (cont.):

49 The Sacking of Afinsa (cont.) Due to the different types of contracts at AFINSA repurchases were scheduled over a period of up to seven years. AFINSA made an orderly marketplace for their clients’ stamps and planned their business on selling and buying stamps every month and year based on the 26 years of their business, in good and bad financial times, AFINSA could plan for the future. Once AFINSA was suddenly shut down the world’s largest philatelic market maker was lost to the clients and their investments were “frozen” by the illegal bankruptcy.

The Sacking of Afinsa (cont.):

50 The Sacking of Afinsa (cont.) 16. Many other questions remain unanswered. For example, how much influence did a Georgia, U.S.A. based hedge fund, Kingsford Capital, and its complaint about AFINSA and Escala to the prosecutor actually have? Kingsford was “short” on Escala shares and its inside knowledge of the impending raid of May 9th, 2006 may have enriched it via “insider trading” for hundreds of millions of dollars.

The Sacking of Afinsa (cont.):

51 The Sacking of Afinsa (cont.) How much influence did Barron’s reporter Neil Martin have with the Spanish prosecutor he mentions in his articles? Did the known collaboration of the reporter, Neil Martin, and Kingsford hedge fund principal, Louis Corrigan, lead directly to this gigantic “insider trading” windfall?

The Sacking of Afinsa (cont.):

52 The Sacking of Afinsa (cont.) There is much more to this sad story than anyone had ever suspected based on the media’s limited access and carefully controlled government press releases. Now, almost seven years later with still NO ANSWERS yet, isn’t it time to find out the truth?.

The Sacking of Afinsa (cont.):

53 The Sacking of Afinsa (cont.) When a State intervenes a Company, it does so to protect the interests of its clients, its employees, its creditors and, ultimately, to try to save the Company itself. Those, and not others, should be the reasons justifying an intervention. However, regarding Afinsa not one of these goals has been met. As for us, the clients, we have not recovered a cent of our money; in fact, we have lost everything; the employees were summarily dismissed, and the Company ceased its activity instantly from intervention time.

The Sacking of Afinsa (cont.):

54 The Sacking of Afinsa (cont.) No one, apparently, has benefited from the actions of the Anti-corruption Prosecutor, except the Bankruptcy Trustees, especially those appointed to Escala’s Board of Directors who made many hundreds of thousands of Euros in fees, salary and bonus payments all at the expense of Afinsa clients and Escala shareholders.

The Sacking of Afinsa (cont.):

55 The Sacking of Afinsa (cont.) Literally millions of Euros have been wasted, rare stamps have been stolen from a supposed “Secure” facility and no end is even in sight to this waste of almost seven years. This monumental mismanagement of individuals and a previously esteemed companies assets has to stop. We need accountability; if there was fraud then show us the proof; if not, then the Spanish Government’s Prosecutors and Judges have to be held accountable for this wanton destruction of assets.

The Sacking of Afinsa (cont.):

56 The Sacking of Afinsa (cont.) On May 9, 2006, a formidable machinery was launched that resulted in the intervention of a solvent company's impeccable track record and destroyed it in just a few hours. My wish is that this piece serves to shed light on what this intervention really hides.

authorStream Live Help