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Act local, be global, remain what we are

Luxembourg currently faces many issues that should definitely have been avoided if advice like mine were taken into account in time.

They thought that they had found THE solution, with LIGFI.

I expressed three years ago on this blog my doubts about LIGFI.

It is interesting to perform a review of the last months.

Ligfi was remamed Tigfi with the Motto: "Act local be Global".

Ligfi mission is stated on the website “The role of The Institute for Global Financial Integrity (TIGFI), as a private, independent and impartial nonprofit organization, is to serve as a Center of Excellence and Forum on all matters pertaining to ethical conduct and integrity in business standards and practices in the global financial sector, national financial centers and jurisdictions. The core purpose of TIGFI is to support and promote professional excellence and ethical business standards and practices from within the global financial sector, national financial centers and jurisdictions. Its activities fall within the realm of corporate social responsibility and of environmental, social and governance (ESG) issues."

With so an impressive mission statement one would expect that this so called "Center of Excellence and Forum on all matters pertaining to ethical conduct and integrity in business standards" would discuss issues taking place in Luxembourg and abroad.

A Google search on LIGFI/TIGFI website with a couple of keyword shows to what extend TIGFI is actually a Forum on all matters pertaining to ethical conduct and integrity in business standards with its highly qualified and outstanding research professionals from industry and academe.




I posted many articles, especially one to call LIGFI to do the job as my report to the European Commission demonstrates the reason why the Madoff fraud took place in Luxembourg

Why TIGFI highly qualified and outstanding research professionals from industry and academe did not contribute about that?




I knew neither Mr Becca nor Mr Finck but the Corporate Regisration was telling enough to raise conflict of interest and lax situations in the Corporate Registration for the least (See my previous articles about Luxembourg).

Why TIGFI highly qualified and outstanding research professionals from industry and academe did not contribute about that?


Hsbc files


German prosecutors targeted suspected tax cheats using data stolen from HSBC in Luxembourg, according to German media reports(See article 1 and 2 about the issue).

Why TIGFI highly qualified and outstanding research professionals from industry and academe did not contribute about that?




Belgian tax admin reported that scams were created in Luxembourg  (See article 1 and 2)

Scams were created in Luxembourg to bypass the OECD convention on bribery and finance elections (See article 1 and 2). Neither Heine nore Eurolux are quoted on the website.

Luxembourg police did a very good job to tighten up the ship but nobody acted to prevent such scams.

Why TIGFI highly qualified and outstanding research professionals from industry and academe did not contribute about about that?


Prosecutor Biever's statement



General prosecutor Biever observed that there are “too little resources for financial files” and a “Lack of political will to fight financial crime” (See article 1 and 2)

Why TIGFI highly qualified and outstanding research professionals from industry and academe did not contribute about that?


Libor scandal


Libor scandal is a recent issue that took place in the UK with consequences worldwide.

Why TIGFI highly qualified and outstanding research professionals from industry and academe did not contribute about that?


 The exemples are not exhaustive.


The fact that the above issues are still under investigation is not a relevant explanation to hush up the debate.



FATF Report

As far as AML is concerned what about FATF report on the website? There are results that are consistent neither with the communication of center nor the facts.


What was the communication before the report?

FATF issued a report that was very negative.

I thought everything was fine. TIGFI highly qualified and outstanding research professionals from industry and academe had said that. I was unable to find any TIGFI opinion about this FATF report when it was published.

Luxembourg enacted legislation in a hurry to be compliant again.

However, "It is one thing to enact laws, and another to enforce them" (Angel Gurría, OECD Secretary-General). 

International organisations perform a control that is a charade : It was said in 2004 that "Luxembourg is broadly compliant with almost all of the FATF Recommendations."  and the jurisdiction communicated about that so called compliance.


Minister Biltgen wondered before the LIGFI audience that “The question remains, why is there such a gap between reality and the public perception of Luxembourg as a shady financial centre? “ (Quoted by LFF, 13 September 2011)

I guess everyone in the audience clapped like LFF that kills the messenger.

The first who tells the truth shall be executed

TIGFI contributions including in the framework of costly lunches at Cercle Munster are actually interesting but theorical as they are not based on what is going on: they are not pragmatic enough as they deny reality by hushing up issues and not stating concrete problems that are visible in public and official sources.

See for example what Jean Guill, who chairs CSSF, said. I will pick up his last sentence: “You  are  never  completely  certain  that  there  cannot  be  fraud.  You can’t regulate it away.”

I do not agree with him. You can control most fraud in Luxembourg as they are due to conflicts of interests and lax business behavior visible in the Corporate Registration that are denied by the regulator (not any word in Guill’s paper)


What is TIGFI motto?


Act local… Surely

Be global. Possibly


Remain what we are… De-fi-ni-te-ly


Let’s read again what I said in FT a couple of years ago: The [financial centre of Luxembourg] wants to brush up its governance. If it doesn’t do that in the next few months, the centre will collapse.” He predicts, if the regulatory situation is not sorted out, dissatisfied investors and asset managers will move their business elsewhere.”



I am afraid that TIGFI highly qualified and outstanding research professionals from industry and academe are tired and should retire…





06:18 Posted in Luxembourg | Permalink | Comments (0)


OLOS and the regulation

In my previous post, I mentioned my investigation in the Luxembourg Corporate registration about a businessman named Flavio Becca: I did not know him and had never heard about him.

I found that he was founder and/or director of 84 companies.

I found as well that he became a PSF (Professional of the Financial Sector), regulated by CSSF with the creation of LYNX INVESTMENT MANAGEMENT S.A. that was later renamed OLOS MANAGEMENT S.A, and of a fund linked to it, which resulted from the merger of many of Becca’s companies to build the fund.

The analysis of every publication relating to LYNX/OLOS is very interesting.

Members of the Board were originally

a) Mr Jean-Claude FINCK, General Manager and Chairman of  BCEE

b) Mr André WILWERT

c) Mr Flavio BECCA

d) Mr Eric LUX

e) Mr Romain BONTEMPS

When the study was published late September 2011, Mouvement Ecologique emphasized that Jean-Claude FINCK, who is first quoted on the list, should not be there. And Finck resigned a couple of weeks later. He actually should never have been involved in  such a venture.PwC is the auditor of the fund.

The press reported (French or  Germanthat according to the last audit reports, it appears that Flavio Becca's fund OLOS is sitting on a mountain of mortgages that total €508 million. Usually such a heavy load of mortgages is not an issue, but should real estate lose value, the fund could get into financial trouble.

Most experts expect Luxembourg's real estate market to continue to be stable despite the present economic crisis that cannot be hidden anymore. The threat of a real estate bubble does not exist, according to the same experts who denied that the center was perfectible in its regulation. But then got a huge surprise after the publication of a very negative FATF (Financial Action Task Force of OECD) report.

The prices for real estate are rather climbing. Still Becca's investments can only be profitable if he doesn't sell in the short term, according to PwC.

However in their analysis PwC notes that credits of €227 million must be paid back next year. The fund has ordered "specialists in London and Luxembourg" to find a solution to pay them back, which probably can only be done by refinancing and restructuring the debt Will there be any takers?

According to the media, the manager of the fund is "confident" that the continuing existence of the fund is secured, according to the report.

However, according to RTL that quoted Land, "La trésorerie de Flavio Becca est ex-sangue et ses banquiers ne sont plus disposés à lui ouvrir le robinet des crédits, notamment pour alimenter le fonds OLOS, regroupant notamment les participations immobilières de Flavo Becca et ne valant plus rien." (Free translation  “Flavio Becca's finance is pale and bankers are no longer inclined to open him the credit faucet, in particular to feed the fund OLOS, merging in particular the Flavio Becca’s real estate participations which are basically worthless.”)

And Land quoted by RTL to underline that « Selon des informations du Lëtzebuerger Land, il faut que les juristes de la BCEE soient consultés quand les lignes de crédits du fonds sont augmentées » (free translation : According to information from Lëtzebuerger Land, lawyers of BCEE have to be consulted when credit lines of the funds are increased)

Finck resigned on 25 November 2011. He was definitely director most of the year under review (328 days) in a company where the bank he chairs is a stakeholder.

The last page of the audit report is very interesting










It says “new debts towards BCEE”, which means that there are already debts that were contracted when Finck was director.

In this context it is amazing to read again a publication online on the website of Chambre des Députés : “Immaculate BCEE


« M. Becca dispose bien de lignes de crédit auprès de la BCEE pour d’autres projets et affaires, mais celles-ci sont garanties à 100% par des actifs réels qui sauraient être monétisés dans un intervalle de temps très court en cas de défaillance ou d’insolvabilité de M. Becca (…) La Commission de surveillance du secteur financier (CSSF) n’a à aucun moment émis de mise en garde (single exposure warning) à propos du client Becca auprès de la BCEE (…) Jean-Claude Finck a tenu à préciser qu’il y siège en tant que représentant de la BCEE sur vœu exprès des parties en présence, c’est-à-dire des deux autres banques. L’acquisition une fois réalisée, le fonds immobilier en question n’a plus accordé le moindre crédit à Becca »


(free translation : Mr. Becca actually has credit lines with BCEE for other projects and businesses, but these are guaranteed to 100% by actual assets which could be monetized in a a very short time in the event of failure or of insolvency of Mr. Becca (…) CSSF never ever issued  any single exposure warning relating to Becca, client at the BCEE (…) Jean-Claude Finck made a point of specifying that he is a Board member there as a representative of BCEE on the express wish of the parties, i.e. of the two other banks. The acquisition once carried out, the real estate fund in question did not grant the least credit any more to Becca.

The real estate fund in question did not grant the least credit any more to Becca. Until recently…

It is not clear either what BCEE's total exposure to Becca is. There is the information about 2 loans totaling € 70 million. And then there are credit lines not further specified. But PwC mentions that in order to draw any further on those credit lines, BCEE's lawyers have to be informed. Does this mean that BCEE should or will actually cancel those credit lines, but maintains them as window dressing so the auditors and potential new investors remain comfortable? Does it mean that BCEE took precautions to pull the plug in the event of a further deterioration of cash flow?

I also thought about Moody's and there comment that 43% of Luxembourg mortgages are issued by BCEE. If Becca falls, the bubble might burst, and many mortgages will be threatened. For the simple reason that people will have more residual debt than their real estate is worth. As happens in Spain, Greece, and the US where they call those mortgages "under water". that threat, though remote, has been factored into Moody's downgrade of BCEE.



Data relating to the fund are available on Finesti

OLOS Accounts are online on Fisec blog


17:00 Posted in Luxembourg | Permalink | Comments (2)


Back on this blog with a telling case in Luxembourg

As I am launching a new company (I will publish soon about it on this blog, but impatient French readers may have a look at the website), what is taking place in Luxembourg is very interesting and corroborates what I wrote in my articles and in my book Vus pas pris (“Seen, not caught”), that was published in 2006.

Last summer I did a study in the Luxembourg Corporate Registration about a business man called Flavio Becca.

I did not know Flavio Becca and had never heard about him.

As I went along the Corporate Registration, what I found was so telling of a way of doing business that I do not like:

-       Balance sheets not published,

-       Same person being director in Becca’s firms and director of the legal person acting as statutory auditor (what about the independence?),

-       Ratios


The study was made public by Mouvement Ecologique late September 2011

At this period it was reported in  the media that Flavio Becca was under investigation into alleged misappropriation of public property (See Reuters or Wort).

The day after, Mouvement Ecologique published a letter involving some government members, including Prime Minister Juncker, in an active support to Flavio Becca.

The case exploded a couple of months ago when Guy Rollinger, Becca’s competitor, said he was forced by some government members to give up his project .

Police announced an inquiry into Becca’s affair

Politicians decided finally to hush up the story.

There should be a Chinese wall between the public decision making process and companies, which is not the case in the jurisdiction.

The conflict of interest situation is actually the hallmark of the Luxembourg financial center.

Let’s have a look on PwC’s brochure: “Why Luxembourg? a unique location to expand your business”:

Let's have a look page 8 of the file :


page PwC.jpg


A “business oriented government” means a government that tolerates lax business attitudes.

An “easy access to decision makers” means politicians that vote in favor of the legal and regulatory framework that do not worry professionals as much as in a state that is governed by the rule of law, as police and  justice are limited by what is voted for by the legislature.

As far as Justice is limited, there are traditionally two categories of civil servants with judicial authority: those that are said to be “standing up” (public prosecutors/prosecuting attorneys) and those that are said to be "sitting" (judges).

When I see affairs like this one but as well Madoff, Clearstream… , I think that in Luxembourg professionals would prefer a unique category of civil servants with judicial authority: everyone "lying down".

Fortunately, there are civil servants with judicial authority, who deserve respect, like general public prosecutor Robert Biever, who observed last October 2011 that there are too little resources for financial cases and there is a lack of political will to fight financial crime (See Le Quotidien and Paperjam)

And more recently in Becca's affair the former prosecutor Jean Bour observed contradictions and what I consider as unprofessional behaviors for the least.

Besides, there is a very good thing: the media did not hush up Becca’s story that is a caricature of what a so-called business oriented government is, including Wort that is said to be close to Government.


I am going to act to contribute to the paradigm shift that is critical to the sustainability of the financial center in a competitive world where professional and responsible attitudes are required.

07:19 Posted in Luxembourg | Permalink | Comments (0)