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COSTA CALIDA EDITION COSTA CALIDA
Your English Newspaper
roundtownnews.com
18 - 24 3-9JULY JAN 2014
Issue 90
Tide turns for Landsbanki victims by Jack Troughton
Emmanuel Vadon & Ford Galaxy
Cruz Azul celebrates in USA style CRUZ AZUL celebrated their first anniversary in true USA style on Friday 4th July at their shop in San Javier. Restaurante Hispania provided a super American-style barbeque and the rock and blues band, Los Duques, got the volunteers and supporters rocking. Read the full story on page 21.
VICTIMS OF a fraudulent equity release scheme touted by bankrupt Icelandic bank Landsbanki have taken heart from a string of court victories across Europe. An estimated 600 pensioners in Spain, France, Germany, and Portugal, were sold a heavily marketed ‘no risk’ financial package between 2006 and 2008 by subsidiary Landsbanki Luxembourg. It was claimed the bank was AAA-rated but it collapsed at the start of the credit crunch. Details of the bank using “exotic” offshore companies to buy its own shares to protect its standing have since emerged – with directors of the bank in Iceland facing prosecution. Described as a “toxic” product from the start, it is conservatively estimated the fraud involves 120 million Euros. The equity release scheme was not licensed in Spain but the ‘asset rich, cash poor’ investors were promised they could draw down 25% of the value of their homes, the remaining 75% being held by the bank in a managed investment portfolio. They were also told the “self-funding” scheme would produce a gross return of
9%. The majority, 6%, would be held as management fees and repay the capital loan – the remaining 3% was sold as an attractive source of income. Further, pensioners were told the scheme would guarantee the avoidance of Spanish inheritance tax. In 2006, the equity release scheme returned 2% - investors were told not to worry as it was a long term investment. In 2007, returns dipped under 2% and questions started to be raised. However, Landsbanki failed in the autumn of 2008 and administrator Yvette Hamilius was appointed administrator. Victims were shocked to find they were debtors of the bank rather than investors and their homes were at risk because of the mortgages advanced. In early 2009, the Landsbanki Victims Action Group with its 180 members based on the Costa Blanca, the Costa del Sol and the Balearic Islands. Similar groups formed in other countries. Courts in Denia and San Roque are investigating the Spanish cases over allegations of fraud and have ring-fenced properties to prevent them being repossessed by Ms Hamilius. Continued on page 4