The Vatican-owned Chelsea property at the heart of a corruption trial which has engulfed the Holy See in recent months could sell for £200m, after intense bidding pushed it well above the £180m asking price.
The property at 60 Sloane Avenue, SW3, is set to go to a joint venture between Bain Capital and CIT, which has emerged as a frontrunner ahead of bidders including Angelo Gordon, Tristan Capital, CORE and Greycoat.
Savills, which is running the sale, has marketed the former Harrods showroom as a redevelopment opportunity, with vacant possession within 12 months. The building has planning permission for a 200,000 sq ft mixed-use scheme.
Despite the sharp increase in the potential sale price, the sale will crystallise losses of nearly £100m for the Vatican’s secretariat of state, which allegedly spent €350m (£299m) of church money on the property over a number of years.
A high-ranking cardinal has been accused of misusing church funds to buy the site while he worked for the Holy See.
A trial opened in Vatican City this summer in which Vatican prosecutors alleged that 10 defendants, including several London financiers and church employees, engaged in embezzlement, fraud and corruption.
Among them is the cardinal Angelo Becciu, 73, who is charged with spending the money on a botched deal to buy the property, which went on to incur huge losses. He denies wrongdoing.
Trial rumbles on
The saga began in 2014, when the secretariat of state allegedly invested more than €200m, much of it from charitable contributions, into a fund run by Italian investment broker Raffaele Mincione, securing about 45% of the building.
Mincione was subsequently accused of deceiving the Vatican, which in 2018 tried to end the relationship with him. It then allegedly turned to another broker, Gianluigi Torzi, for help in buying up the rest of the building, but later accused him of extortion.
At the time, Becciu was in post as deputy secretary of state. Over the years in question, the organisation is said to have sunk more than €350m into the investment. All defendants deny wrongdoing.
Becciu was sacked by the Pope last year, as allegations of financial misdeeds emerged. The charges against him include allegedly channelling money to businesses run by his brothers in Sardinia.
In April, the Pope said that cardinals and bishops accused of crimes would be tried by conventional judges, not by cardinals, which was previously the case.
The Vatican’s new finance boss, Juan Antonio Guerrero, has said it is now being more transparent about its affairs.
In July, the Vatican published details of its holdings, including more than 4,000 properties in Italy and 1,120 in other European cities. The 30-page document reportedly shows further property holdings in Geneva, Lausanne and Paris.
However, the trial took an unexpected turn earlier this month, when the chief judge said the prosecution must give the defence more access to evidence and question defendants who were not given the right to speak earlier.
Court president Giuseppe Pignatone was responding to a surprise offer by the prosecution on 6 October, in which it acknowledged weaknesses in its case and said it was willing to return to the investigative phase to fill in gaps contested by the defence.
Pignatone ordered prosecutors to give the defence access to remaining documentation, evidence, videos of interrogations and other material by 3 November. The trial has been adjourned until 17 November.
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