Published on November 17th, 2011 |
by Joe Hinds
Image ©
[caption id="" align="alignleft" width="240" caption="Cholera Still Kills Thousands In The DRC Yet Vultures Funds Ordered $100m In Outdated Debts By Jersey Courts © Oxfam International"]
[/caption]
A legal 'loophole' in the UK's Anti-Vulture Law, which prevents the bill from extending to Jersey and the British Virgin Islands, currently allows Vulture Funds to collect on outstanding debts from some of Africa's poorest nations. The loophole has so far allowed vulture group FG Hemisphere (now known as FG Capital Management) to claim $100m from the Democratic Republic of Congo (DRC), from a debt that they privately bought for $3m. This payment, ordered by the Jersey Courts, has paved the way for other Vultures Funds that are currently waiting on a further $1.47bn in payments from other poverty stricken African Countries.
So How Do The Vulture Funds Work?
Vulture Funds buy the debt of poor countries for a cut price, usually while the country is stricken with civil war or during disease epidemics, and once investors return to the countries they demand that their debt be repaid in its entirety, including substantial interest. The debts purchased by the vulture funds usually date back to to the 1970s & 1980s and are presumed to be written off by African Countries. Already more than $1bn worth of third world debt had been paid out, legally, to Vulture Funds before the UK passed the Anti-Vulture Law, prohibiting UK courts from sanctioning Vulture Debts but this new loophole poses a new threat to the already desperately poor nations of Africa.
Who Are The Vultures
Paul Singer, a prominent US Republican Party Donor, bought a Peruvian debt of $20m and successfully sued for $58m in 1995, whilst a subsidiary Singer's firm bought a $30m debt owed by Congo-Brazzaville at a cut-down price, and was awarded more than $100m in interest in 2002 and 2003. Dozens of other Vulture Funds have successfully claimed millions from the DRC, Liberia and Zambia over recent years (to name but a few) but all this was thought to have stopped after the introduction of the new legislation prohibiting Vulture Funds. However, since the news of the Jersey loophole there have been a number of prominent Vulture Fund individuals who have reared their ugly heads, the most prominent of these being Donegal International director Michael Sheehan and FG Management's owner Peter Grossman,who is at the forefront of the current $100m payment that the DRC has been ordered to pay by Jersey courts
FG Management
Grossman's current $100m DRC debt payout comes from a $3m debt that Zaire had owed Yugoslavia, illegally bought from the former Bosnian Prime Minister Nedzad Brankovic several years ago. Due to astronomical interest rates and the Jersey Courts ruling, this debt has now been transformed into the $100m that the DRC has been ordered to pay Grossman. Prior to the Jersey ruling Grossman received considerable notoriety after he attempted to, unsuccessfully, seize the DRC's embassy building in Washington as a downpayment on the debt owed. An in-depth video detailing the current situation regarding FG Management and the DRC's debt by Greg Palast can be seen here.
Due to the mere exclusion of 'and Jersey' from the current Anti-Vulture UK legislation, a huge loophole has been created which threatens the future of so many of Africa's poorest nations and the lives of their citizens. In the DRC alone the $100m to be payed out to FG Management would have had the potential, according to Unicef experts, to save the lives of 200,000 children who will otherwise die from cholera and other poverty-related diseases. The UK government must not stand idly by and allow a few individuals to substantially profit from outdated debts from countries where thousands are dying simply because they do not even have access to clean water. An amendment to the current bill would not cause a problem for Parliament to pass and would save the lives of hundreds of thousands of Africans. Action must be taken.
You can sign the online petition to put pressure on the chief minister of Jersey, Ian Gors, to pass the Vulture Funds Law in Jersey here.
Jersey Must Be Included In UK’s Anti-Vulture Law To Save African Lives
Cholera Still Kills Thousands In The DRC Yet Vultures Funds Ordered $100m In Outdated Debts By Jersey Courts © Oxfam International
A legal ‘loophole’ in the UK’s Anti-Vulture Law, which prevents the bill from extending to Jersey and the British Virgin Islands, currently allows Vulture Funds to collect on outstanding debts from some of Africa’s poorest nations. The loophole has so far allowed vulture group FG Hemisphere (now known as FG Capital Management) to claim $100m from the Democratic Republic of Congo (DRC), from a debt that they privately bought for $3m. This payment, ordered by the Jersey Courts, has paved the way for other Vultures Funds that are currently waiting on a further $1.47bn in payments from other poverty stricken African Countries.
So How Do The Vulture Funds Work?
Vulture Funds buy the debt of poor countries for a cut price, usually while the country is stricken with civil war or during disease epidemics, and once investors return to the countries they demand that their debt be repaid in its entirety, including substantial interest. The debts purchased by the vulture funds usually date back to to the 1970s & 1980s and are presumed to be written off by African Countries. Already more than $1bn worth of third world debt had been paid out, legally, to Vulture Funds before the UK passed the Anti-Vulture Law, prohibiting UK courts from sanctioning Vulture Debts but this new loophole poses a new threat to the already desperately poor nations of Africa.
Who Are The Vultures
Paul Singer, a prominent US Republican Party Donor, bought a Peruvian debt of $20m and successfully sued for $58m in 1995, whilst a subsidiary Singer’s firm bought a $30m debt owed by Congo-Brazzaville at a cut-down price, and was awarded more than $100m in interest in 2002 and 2003. Dozens of other Vulture Funds have successfully claimed millions from the DRC, Liberia and Zambia over recent years (to name but a few) but all this was thought to have stopped after the introduction of the new legislation prohibiting Vulture Funds. However, since the news of the Jersey loophole there have been a number of prominent Vulture Fund individuals who have reared their ugly heads, the most prominent of these being Donegal International director Michael Sheehan and FG Management’s owner Peter Grossman,who is at the forefront of the current $100m payment that the DRC has been ordered to pay by Jersey courts
FG Management
Grossman’s current $100m DRC debt payout comes from a $3m debt that Zaire had owed Yugoslavia, illegally bought from the former Bosnian Prime Minister Nedzad Brankovic several years ago. Due to astronomical interest rates and the Jersey Courts ruling, this debt has now been transformed into the $100m that the DRC has been ordered to pay Grossman. Prior to the Jersey ruling Grossman received considerable notoriety after he attempted to, unsuccessfully, seize the DRC’s embassy building in Washington as a downpayment on the debt owed. An in-depth video detailing the current situation regarding FG Management and the DRC’s debt by Greg Palast can be seen here.
Due to the mere exclusion of ’and Jersey’ from the current Anti-Vulture UK legislation, a huge loophole has been created which threatens the future of so many of Africa’s poorest nations and the lives of their citizens. In the DRC alone the $100m to be payed out to FG Management would have had the potential, according to Unicef experts, to save the lives of 200,000 children who will otherwise die from cholera and other poverty-related diseases. The UK government must not stand idly by and allow a few individuals to substantially profit from outdated debts from countries where thousands are dying simply because they do not even have access to clean water. An amendment to the current bill would not cause a problem for Parliament to pass and would save the lives of hundreds of thousands of Africans. Action must be taken.
You can sign the online petition to put pressure on the chief minister of Jersey, Ian Gors, to pass the Vulture Funds Law in Jersey here.
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