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Saturday, 8 February 2014

The nasty prelude towards the nationalization of SNS Reaal: letter from a reader, whose construction firm is falsely accused of criminal behaviour!

On 3 February, 2014, I wrote my article about the mounting problems for the Dutch Finance Minister and chairman of the Euro-group Jeroen Dijsselbloem. In this article, I printed a list of blunders and less fortunate actions, done by this chairman in distress.

The day after, I received an intriguing letter from a reader in Spain, Jaafar Jalabi. Mr. Jalabi is the managing director of the Spanish construction and exploitation company "Parcelatoria de Gonzalo Chacón" (PGC).

Jaafar Jalabi wanted to know why I didn’t mention the turbulent prelude to the nationalization of SNS Reaal in the list of unfortunate actions of Jeroen Dijsselbloem.

Besides that, Jalabi stated that he had become the victim of evidently slanderous accusations by the temporary managing director of SNS Property Finance, Buck G.

He dearly wanted an answer to the question why the board of directors SNS Reaal didn’t do anything to stop the slanderous (criminal) lawsuits, which were filed against him. Especially as he had sent multiple warning letters to the executives of SNS Reaal, that they didn´t have a case at all and subsequently won all lawsuits that were filed against him and his company.

Here is the almost integral letter of Jaafar Jalabi:

Dear Sir,

I have been following your Blog for a while. I was wondering in your commentary today why you did not mention the debacle of the nationalization of SNS REAAL as another issue of concern for the Dutch Minister of Finance.

I know that the current Minister of Finance formed in early 2013, the committee to investigate the failure of proper supervision by the Central Bank of Holland and the Ministry of Finance, of SNS REAAL, since SNSPF purchased Bouwfonds in 2006 and until the takeover by the Dutch State of SNS REAAL. However; and out of direct private information that I have, I could prove that the current Minister of Finance is not cleaning up Propertize B.V.[this is the new working title for SNS PF – EL] fast enough.

Let me introduce myself first, my name is Jaafar Jalabi and I am the managing director and a major shareholder of a Spanish company called "Parcelatoria de Gonzalo Chacón" (hereafter: PGC) that is involved in a serious dispute with a Spanish affiliate of Propertize B.V. (formerly SNSPF) called PROCOM Desarrollos Urbanos (hereafter ¨PDU¨).

Propertize B.V. fully controls PDU and has 2 members in the board of directors. PGC was a co-developer, partner, and operator in a very successful shopping centre in Spain called Madrid Xanadu and wanted to do the same project with PDU in Valencia, Spain.

The dispute involves a total of 4 lawsuits that were started by Buck G. and his corrupt team in Spain back in 2010 in order not to pay PGC a contracted amount of € 6.46 million in June 2011.
The contract was signed back in 2005 in the presence of a Notary Public. PDU has lost all 4 lawsuits including a criminal lawsuit that they filed against me in 2011. The damage to PGC and to me has been tremendous and I will seek compensation through the courts in Spain.

What is not clear to me (and this is my question to you) is the following: that Buck G. started all of this (before going to jail) and thus has opened the door for criminal and civil actions that I could take against the hierarchy of SNS REAAL, SNS Bank, Propertize and possibly NLFI.

Why nobody took corrective measures in spite of the fact that I wrote several letters to the top managers of SNS REAAL, SNS Bank and SNSPF asking them to stop this conduct of tort?

I would like to state clearly that the dispute is about a contracted payment to "Parcelatoria de Gonzalo Chacón" (PGC) of € 6.46 million that PGC was able to collect through the court system in Spain. However, in order to collect the payment, it suffered serious damage particularly after PDU filed a criminal lawsuit against me that they recently lost. Propertize has already paid € 8.06 million to the court (€ 6.46 million principal that PGC had already collected  + € 1.6 million as a provision for delayed interest and legal costs) and I am sure that Propertize has paid millions in legal fees to its lawyers. I will eventually ask the courts for criminal responsibilities and fraud of the Propertize team and for damages that are in the many many millions of euros.

I am sure that Propertize is full of such examples (please look at the English version of the prospectus to raise € 4.056 billion guaranteed by the Dutch State, page 24 under the paragraph titled Litigation or other… and on page 25 under the paragraph titled A Significant Portion of Propertize…). Continuing futile legal fights that were started by Buck G. (may be for corrupt reasons) will only exacerbate the damage that will eventually be borne by the Dutch tax payer. I feel sorry for him and her!

I have been following this file very closely and with my Dutch lawyers for the past 3 years. If you are interested in any further information then do not hesitate to contact me.

And yesterday, Jaafar Jalabi sent a second letter:

Second letter of Jaafar Jalabi

Second, as you would expect, I have been following the issue of SNS REAAL, SNS Bank and SNSPF now Propertize ver carefully and with the help of my Dutch Civil Lawyers. My civil lawyers are kept up to date continuously and this is why I was in Rotterdam yesterday.

Under Buck G., and for suspicious reasons a series of lawsuits were started by PDU, but highly influenced by SNSPF, the last of which was a criminal lawsuit against me. The criminal lawsuit was dismissed earlier on this week and in a form that is very definite.  

Usually when criminal lawsuits are dismissed in Spain they are dismissed provisionally, something like 95 % of the dismissals are as such, in my case the dismissal is in a form that is definite and that allows me to go criminally in Spain against top people in Propertize, SNS Bank, and SNS REAAL.

So far PDU have lost all civil and criminal lawsuits against me and in a very condemning manner and at a huge cost to the Dutch tax payer which I have proof of.

As a matter of fact and purely through the courts, I was able to obtain some PDU board resolutions that are very incriminating. I have proof that so far SNSPF has accumulated losses of around € 175 million + in PDU in addition to the SNSPF exposure in the now infamous shopping center in Zaragosa.

Third, I know that both the FD reporters and the NRC reporters are following up on the matter and I could be of extreme help to them in relation with the Propertize exposure in Spain, as I have a very significant amount of documented information.

I have a team working for me whose job over the last 3 years and 3 months has been purely PDU and SNSPF. I am more than happy to share the information with whoever you think should get it as, as I said before I really feel that the clean up in Propertize is not deep enough, or fast enough and it will cost the Dutch tax payer more money.

Propertize has recently issued in excess of € 4 billion notes that are guaranteed by the Dutch State, should this not be better scrutinised by the public and for the sake of the public!

For Buck G., I only use his first name and initial, as this is the habit in The Netherlands. Interested readers, however, will not have much difficulty to acquire his full name.

Mr. Jaafar Jalabi
Owner / Managing Director of Parceletoria de Gonzalo Chacón
Picture copyright of: Ernst Labruyère
Click to enlarge
Further, I checked the credentials of Mr. Jaafar Jalabi, as well as his company Parceletoria de Gonzalo Chacón, and I also checked Jalabi’s referral to Madrid, where his company would have worked in cooperation with others to build the Xanadu shopping centre. All the information that Jaafar Jalabi supplied to me seems to be genuine and right.

What I print here is Jalabi’s  side of the story.

As I am not a real journalist, who is doing this work for a living, I am not in the position to thoroughly check both sides of the story. However, everything about this story by Jaafar Jalabi seems impressive and genuine. It undoubtedly sets the impression that SNS Property Finance (now Propertize BV) has acted like a cornered cat during the last years, when it tried to recover some of its Spanish investments gone awry.

Nevertheless, if Buck G. feels obliged to respond to these accusations, please let him feel free to get in touch with me, through the email address in my profile. I want to say to him, however, that he must have a darn good story, as the accusations towards Jalabi and his company have seemingly been slashed by the Spanish civil and criminal courts, as being false and unjustified.

Now I will try to give an answer to the urgent and justified questions of Jaafar Jalabi, which he put in the red and bold text in the first letter. I summarized those to the following two questions:

Why did Buck G. started these false accusations against me, even if this could lead to legal actions against him and his company?

Why didn’t the executive management of SNS PF and SNS Reaal stop him? Or perhaps even De Nederlandsche Bank or the Dutch Finance Minister?

With respect to the first question, there is only one answer in my opinion:

Buck G. had rigged a team, consisting of himself and a few befriended and probably very well-paid ‘hotshot’ lawyers. Such teams have to fight some battles and deliver something, in order to justify their high expenses and – as a matter of fact – their very existence.

Therefore I suspect that Buck G. and his team have chosen a few Spanish companies to fight legal battles with, just for the purpose of it. Spain is far away and they hoped that the ‘communis opinio’ in The Netherlands would be that ’the Spaniards were wrong and SNS was right’.

They probably hoped also that the “pomp and circumstance” around such legal battles would generate sympathy and understanding among the supervisors in The Netherlands and the Dutch population: “Well, at least these guys are fighting for every cent of their investments”. Image is everything in the banking business!

Thus, they took for granted the risk that they could lose all cases, probably, as the benefits of FIGHTING these battles were probably bigger than the burdens of LOSING them.

People have to realize that SNS Reaal was in a very awkward position in those days. The losses coming from Property Finance were mounting through the roof and the DNB had finally come out of its micro-prudential ‘hibernation’, after the fiasco’s with ABN Amro, Fortis, Icesave and DSB Bank. This meant that time was running out for SNS Reaal.

Besides that, SNS Reaal hoped at the time, that they could ditch SNS Property Finance in a so-called bad bank, so that SNS Reaal could go on without it. If SNS Reaal would have accepted its losses without a (legal) fight, they might have lost the sympathy of the supervisors and their willingness to cooperate with their plans.

And the answer to Jalabi’s second question is:

The executive management of SNS Reaal could have had the same reasons as Buck G. Not giving the Spanish losses up without a legal fight, ‘for the audience’.

One more thing: before Buck G. had been arrested on allegations of fraud, he had been a very well respected ‘banker turned businessman’. I remember that some colleagues of mine, who had personally known Buck G., hardly could believe that he was accused of fraudulent behaviour. The news hit them like a hammer.  

I guess that Buck’s reputation in those days and – again – the argument that Spain is so far away, has stopped the SNS Reaal executive management from really digging into Jalabi’s written arguments and objections.

Even the loss of the first legal cases against PGC will probably not have changed their mindset, that they had a genuine case against this construction company. Probably, they have thought something like “the Spanish justices have presumably been biased against SNS Reaal”. People know how such things work.

At the time, when Buck G. was arrested, it was probably too late to stop the whole legal battle from unwinding…

And the Dutch Finance Ministry and DNB? They have probably had a race against the clock in order to save SNS Reaal, in which there was no time to dig into legal matters like this case. This was probably the reason that they let these legal cases continue, unfortunately.

I have gotten in touch with Jaafar Jalabi again: if he sends me some interesting information and leads, I will definitely write a follow-up story on this extremely interesting case.

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