Madrid’s Most Indebted Town To Pay €3M More Due To Fraudulent Ex-Mayor

20 October 2017 – El Confidencial

The political legacy of Baltasar Santos (pictured below), who served as the mayor of Navalcarnero for 20 years (between 1995 and 2015), is still taking its toll on the public coffers. According to the Ministry of Finance, Navalcarnero is the most indebted town in the Community of Madrid (and number 24 in the ranking for the whole of Spain). Each one of its 27,000 residents owed more than €3,700 as at the end of 2016. Then, the tax authority based its calculation of financial debt of €101 million, although the current Government estimates that the figure is more like €230 million. And that amount is expected to increase gradually due to the steady trickle of legal rulings that are going to be made against the previous Town Hall due to mismanagement by the former PP-party mayor.

The most recent ruling, issued by the Provincial Court of Madrid on 28 September, ordered the Town Hall to pay €2.8 million (plus legal interest) to around fifteen local residents and companies because the local Government, led then by Santos, sold them land that was not actually owned by the Town Hall (…).

This is the first ruling of its kind, but José Luis Adell, the current (socialist) mayor, expects that more will follow, unfortunately, against the Town Hall due to the “disastrous management by Santos” (…). We estimate that we are going to pay around €70 million in relation to these types of rulings, which will increase the municipal debt to €300 million (…).

Nobody knows where Baltasar Santos is now. He was expelled from the PP in 2015, after hiding from the party that he had been charged for several legal misdemeanours. Santos participated in the municipal elections that year with another political party, URCI (…) but resigned just a few months later, in October 2015, just like he had done previously. Nobody has replaced him. The Town Hall has created an investigation committee to analyse his management. Moreover, it has engaged legal counsel so that all of the irregularities that have been detected can be brought to justice and it has asked the Chamber of Accountants to audit Navalcarnero’s accounts for the financial years from 2007 until 2015.

Original story: El Confidencial (by David Fernández)

Translation: Carmel Drake

Airbnb Pulls 1,000 Listings From Barcelona In The Wake Of Fraud Claims

10 July 2017 – El País

On Tuesday, Airbnb, the short-term home rental site, announced that it has taken down 1,000 listings in Barcelona’s downtown district of Ciutat Vella over the last week. The move comes just days after news emerged about cases of fraud involving homes listed on the popular vacation rental website.

It is also a follow-up to a pledge made by company officials in February, when they said they would introduce a one-host, one-home policy in a part of the city that is under increasing pressure from high levels of tourism. The gesture, meant to reduce the supply of short-term rentals in the area, was also viewed as an olive branch for Barcelona city authorities, who have been critical of Airbnb’s practices.

Back then, Mayor Ada Colau dismissed the gesture as “a joke” and said that what the city wants is for Airbnb to pull all the illegal listings from its site. Local authorities note that tourist apartments require a special license to operate as such, known as HUT under its Catalan acronym.

Now, Airbnb has released an open letter to Barcelona City Hall entitled: “Here’s why City Hall is wrong to turn its back on local families who share their homes.”

“Airbnb wants to be regulated in Barcelona, and we have zero tolerance for bad actors,” states the message. “We want to work with City Hall to clamp down on business operators who break the rules, while protecting local families who share their homes to boost their income and support their families.”

The letter is signed by Sergio Vinay, of the company’s public policy department, which is in charge of negotiating with local and regional authorities.

“In Barcelona, this guiding principle hits a roadblock. Unlike other major cities across the world, Barcelona has no rules for local families who occasionally share their homes,” the letter goes on to say. These rules are currently being worked out at the regional level.

“In the absence of such a collaboration, Airbnb has already taken steps to tackle issues facing Barcelona,” says Vinay in the letter. “In the last week alone, Airbnb has removed more than 1,000 listings that could affect long-term housing availability, as part of our ‘One Host, One Home’ policy. For context, that’s almost double the number of tourist dwellings that have ceased to operate following City Hall action.”

Vinay also takes issue with City Hall urban planning official Janet Sanz, who has been critical of Airbnb: “Janet Sanz is wrong to say that City Hall ‘is not fighting home sharing’ or local families who share their homes. It is – and by choosing to promote a campaign of fear and confusion over workable solutions, it’s local families who stand to lose most.”

The San Francisco-based firm claims that the average Airbnb host in Barcelona is a homeowner who makes an extra income of €5,500 a year on average for “sharing their home” around 70 nights a year. “More than two-thirds of hosts say they share their primary residence and almost a quarter say that sharing their home has helped them avoid eviction or foreclosure.”

Last month, it emerged that a Barcelona woman had rented out her apartment to a long-term tenant, who then illegally listed it on Airbnb and began subletting it. Unable to reach her tenant, the woman was forced to rent out her own place through Airbnb, at which time she changed the lock and reported the case to the authorities.

Original story: El País (by Clara Blanchar)

Translation: Carmel Drake

Santander Uses Uro Property’s First Dividend To Pay Off Debts

6 July 2015 – El Confidencial

Just four months after Uro Property’s IPO on the stock market, the landlord of 1,136 Santander branches, has approved its first dividends and the entity chaired by Ana Botín has used the funds to pay off some of the Socimi’s debts. And that is because Santander is not only the Socimi’s tenant, it is also the main shareholder of the company, previously known as Samos, which it inherited after the company’s bankruptcy due to its inability to pay off debts amounting to more than €2,000 million.

The foreclosure by the banks was orchestrated, primarily, through the company Zitoli, which currently holds 85% of the share capital, whilst Santander owns the remaining 15% as a result of its financing of the mezzanine debt. The two partners have agreed to use the shareholder remuneration that Uro Property has just authorised, amounting to €154.3 million, to repay its debts and continue the clean up of the Socimi.

This decision has been orchestrated through the issue of demand notes, securities that will be capitalised, taking advantage of a capital increase to pay off loans, which will take place this summer, just after 30 July, when the dividend payment will be made. From that moment on, Ziloti and Santander will devote 57% of the remuneration due to them, almost €88 million, to continue with the plan to clean up the Socimi.

The Cantabrian entity has the leading role in this process, since through its indirect shareholding via Ziloti, as well as the direct stake it holds from the inherited mezzanine loan, it holds 24% of the share capital. The next largest shareholder is CaixaBank, with a 15% stake, BNP Paribas with a 8.81% stake and Société Générale, with a 3.14% stake. Moreover, several hedge funds and entities such as Barclays and Bayerische Landesbankhold hold stakes of less than 1%; whilst the former shareholders, Sun Capital, now known as Atisha Holding, and Pearl Group, now Phoenix Life, hold 21.7% and 14.38% stakes, respectively.

These vehicles created the current Uro Property together with Drago Capital, the fund led by Oriol Pujol, which is currently being investigated by the Tax Authorities and from whom the Socimi has made every effort to distance itself. That former link is the main threat that hangs over the entity and could severely jeopardise the efforts being made by it, under the guidelines set out by its creditors to clean up its balance sheet.

In fact, the Socimi is one of 64 individuals and legal entities that have been denounced by the Tax Ministry for “the alleged commission of a crime involving money laundering and fraud”.

Whilst the Courts continue with their investigations, the banks are also progressing quickly with their roadmap designed to financially restructure the Socimi and find an exit for those creditors that do not want to continue to hold shares in the company. One of the main steps taken to that end, besides the listing of Uro Property on the stock exchange, was the sale of 381 branches to Axa for €308 million, which was approved in April, and the issue of bonds amounting to €1,300 million.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake