Third world debt role questioned
Monday 27th June 2011, 3:00PM BST.
Chief Minister Terry Le Sueur
AN official inquiry has been launched into Jersey’s role in forcing third world countries to pay millions of pounds in crippling debt.
Chief Minister Terry Le Sueur has revealed that senior Law Officers, top-ranking civil servants and finance experts have met to look at whether so-called vulture funds should be allowed to use Island courts to chase debts.
The funds buy up the debts of developing countries for a fraction of the amount owed and then aggressively pursue the debtors through the courts to recover as much as possible. Some of the debts date back to the 1980s, with nations having already paid back the original figure borrowed several times over.
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Pot . Kettle . Black !! There looking into vultures !
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Whatever happened to the principal underpining Rants, all ‘pre-finance industry’ of course. Look back at the old Jersey (Norman) laws and they sometimes make more sense than many would care to admit.
Cyril Le Marquand may spin in his grave, but that is the law of ‘unforeseen consequences’ at work. Usury rules OK?
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Maybe not the job to mention when attending the church barbeque for CAFOD
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NO…. in a word these people are parasites and we should not let them operate out of here it’s disgusting in the extreme and has Peter Rachman written all over it….he exploited the residents of Notting Hill for those old enough to remember using Kray twin techniques….this is the same but More and worse….A meeting to discuss WHETHER or not it should be allowed….excuse me ….is it not OBVIOUS…?
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Oh stop whinging you pommies. A contract is a contract etc. etc.
Jersey Lawyers need to eat too.
Where is “Real Truthseeker” when you really need him, or perhaps this adds a few hues of grey to his black and white world ?
All aboard the gravy train !
As for “CAFOD”, very laudable but what about the condoms?
Hedinda
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@ Mark bang on, they just dont want us to know they they are still using it along with maritime laws to abuse other loopholes, god knows how many other folk they have RIPPED OFF and dont even get me started on land registry over here and the way things are administered courtesy of ‘norman law’ some of our so called ‘trusty’ farmers turned business men have been fleecing folk for years using loopholes with maritime law….
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Cato the Elder “And what do you think of usury?” – “What do you think of murder?”
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A useful market function is for some players to provide an exit for those left holding something they don’t want. The absence of such players will drive up the cost, or even possibility, of creating new debt for all.
You can’t have it all ways, either enable the poor to raise capital on the cheap, or not at all. Before you rant that it should be written off, consider how you would feel knowing that it forms part of your pension fund!
Legislate against Usury? Works well for those societies still stuck in the Middle Ages such as Afghanistan and Pakistan? I think you will find the original terms of debt issue were market priced in all but rare occasions.
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Jersey Finance … life enriching.
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Why are these companies using Jersey for this? I assume that it is because this is illegal in the UK and the rest of the EU?
This does not go very well with the squeaky clean image our finance promoters like to portray.
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@ cynic am sure policy holders on many forms are fully aware of how their money and premiums have been abused over the years and money has been lost continually with banks model ing and making horrific returns in their own pockets … Am also sure that things have not changed since prohibition do your homework
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This activity has been made illegal in the UK, see: http://bit.ly/m3t6gf
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“A useful market function is for some players to provide an exit for those left holding something they don’t want.”
What else could we have a useful market in?
Arms, substandard or out of date pharmaceuticals that we would not use on our own population?
Sadly there seems to be some people who are totally unfitted to work in finance as they seem to have no moral standards at all or perhaps despite the protestations of Geoff Cook, John Boothman, Phillip Ozouf et al it is an essential qualification in some areas of the business in Jersey?
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#8 Cynic – I doubt if there are many pension funds in the world who invest in Vulture Funds, and if they do it is purely as a speculative investment which would fall within the restricted investment limits of the fund (usually no more than 5%). The original investment may well have been held by pension funds through an investment fund but again, any investment into a politically and economically volatile country like the Congo would also have been classed as high risk. These would have been written off in the accounts of the investor/lender soon after default (sale of the debt to the Vulture Fund would have been a bonus). Win some lose some.
It is questionable whether the financial gain (to Jersey very small) of allowing these funds to use Jersey courts in the claims process against sovereign territories outweighs the moral issues that arise from those claims. Nor should one overlook the bad p.r. that these claims create especially when we are trying to convince the (financial) world that we are whiter than white. Come on Terry, you’ve been turning a bling eye to this for years.
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Pound of Flesh (6) Oh stop whinging you pommies.
Dear Pound, you appear to be as ill informed as you alter ego nitwit “Real Truthseeker”. Neither I or any of my ancestors is or ever was a ‘pommie’. Racist slander! Please retract.
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In reality only a smidgeon of difference between a “vulture” fund and other “special situations” funds that we have domiciled over here. Get rid of those as well? I doubt. If you follow the logic here, you would also have to ban a lot of hedge funds set up here who take positions in commodity derivatives. Or transfer pricing abuses that deprive developing countries of vital tax revenues. Its not going to happen is it.
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Hi Mark #15,
Ref “Pound of Flesh” etc. I thought that I might share the following with you:
http://en.wikipedia.org/wiki/Shylock#Shylock_and_modern_antisemitism
Dont miss teh WS quote further down:
“Hath not a Jew eyes? Hath not a Jew hands, organs, dimensions, senses, affections, passions; fed with the same food, hurt with the same weapons, subject to the same diseases, heal’d by the same means, warm’d and cool’d by the same winter and summer as a Christian is? If you prick us, do we not bleed? If you tickle us, do we not laugh? If you poison us, do we not die? And if you wrong us, shall we not revenge? If we are like you in the rest, we will resemble you in that. If a Jew wrong a Christian, what is his humility? Revenge. If a Christian wrong a Jew, what should his sufferance be by Christian example? Why, revenge. The villainy you teach me, I will execute, and it shall go hard but I will better the instruction.”
W Shakespeare who died nearly 400 years ago but demonstrates some good use of his MORAL COMPASS to resist some of the bigotry and misinformation of the time.
Justice is a movable feast but wouldn’t the island and the world be a better place if justice was in the hands of the bard genius WS rather than controlled by ILM, D Pond, RT?..etc.etc……..
No real offence intended. There is not enough love in the world and it is not always the right sort.
HS x.
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Nice caption picture for an article about vultures can’t help but see the resemblance.
Let’s face it Jersey is an economic parasite. Its host knows this and is slowly but surely putting a stop to it.
With 25 years experience in the finance industry, I am very well aware of what has and to a disturbing degree still does go on.
The JFSC merely wave a big stick and throw the odd victim to the lions. They know exactly what is going on, but they don’t stop it. No, they give the perpetrators time to conceal it, wind it up or transfer it to another jurisdiction.
Money made, job done, nice lifestyle who cares?
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Hedinda Sands 17
Re: “…the world be a better place if justice was (the subjunctive form “were” sounds so much better) in the hands of the bard genius WS rather than controlled by ILM, D Pond, RT?”
Oh, I do so love that “work” and Venice, beautiful Venice – “La Serenissima” – the home of Justice in the Renaissance period…
But, did Shylock get justice?
I don’t think he did!
He won the case and was told he could have his ‘pound of flesh’ as long as he didn’t spill a drop of blood…in other words, there is always a way of getting out of paying!
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While vulture funds may be unpleasant to some, we should ask you is to blame. It is not Jersey. It is the govenments who encouraged lending to dictators (often no doubt to bolster unsavoury “commercial exports” to the same dictators), then a few years later go off on a massive jolly where they announce they are going to do everything they can to cancel third world debts.
If you get rid of vulture funds, what happens? You destroy the secondary debt market. What do you think is going on in the world at the moment? Banks are tumbling over themselves to manage their exposure to Greek debt. Do we say that this is wrong and that we should force banks to go bankrupt rather than allow them to trade their debt?
To turn the circle back to Hedinda Sands and the Bard, there are 2 problems here.
The first is usury. As soon as you allow interest, debts become a form of investments that people trade. Do we want to stop that? If we do, what would the consequences be?
The second is hubris and hypocrisy. Rather than saying that they will eradicate third world debt, the western governments (who encouraged and often structured the lending in the first place) should have actually done something and paid the debt off. But unfortunately we live in a world where the empty gesture is king.
Jersey should obviously stop allowing vulture funds, not because they are wrong but because they are bad PR. But have no doubts: the politicians who pontificate against vulture funds are the same politicians that encourage lending to dictators because it will fund arms exports or who call off the serious fraud office when they start investigating such matters.
Oh what a tangled web we weave!
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Quote “Chief Minister Terry Le Sueur has revealed that senior Law Officers, top-ranking civil servants and finance experts have met to look at whether so-called vulture funds should be allowed to use Island courts to chase debts.”
Strange that he does not want Vulture funds to stop being administered in the island.. only stop using the courts to chase debts.. The remit of the meeting was probably to ensure JErsey was not doing anything in the Funds Admin world it should’nt be and the only issue would be if we were seen to be shafting the third world countries. Stop the funds, not just the court cases.
Silly me.. I forgot.. local Fund Admin companies probably make a LOT of money out of administering these funds.. and probably pay little tax.
How much did this little get together cost? Was the discussion a five minute aside over coffee and waifer thin mints after a pleasant meal?
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