Call for Jersey to block $100m DR Congo 'vulture' debt

Call for Jersey to block $100m DR Congo 'vulture' debt

www.bbc.co.uk

Charities are calling for Britain's Privy Council to block an American speculator from taking $100m (£62.86m) from the Democratic Republic of Congo.

Peter Grossman runs a so-called vulture fund which buys up the debts of poor nations cheaply and then sues for 10 or 100 times what they paid for them.

(visit the link for the full news article)

these are the types of practices that need to be outlawed worldwide people like Gross-man should swing, it would be funny if his business interests lost so much value that the same happened to him now wouldnt it? Interesting the article states that sale of the loan was illegal in the first place and "that the man who organised the sale, former Bosnian Prime Minister Nedzad Brankovic, "should go to jail". and "The Centre for Investigative Reporting in Sarajevo obtained a police report, which is now with prosecutors, recommending that Mr Brankovic be prosecuted for his part in the sale of the loan to FG Hemisphere."

www.bbc.co.uk
(visit the link for the full news article)

reply to post by trustnothing


Hopefully he will get what is coming to him. Soros too and anyone else that trades in the misery of others.

Sadly though he will probably instead end up in the lap of luxury, lording it over the rest of us

Though, on the surface, this appears to be extremely unscrupulous, the underlying principal is actually very relevant, and will be interesting to follow.

With the recent regime changes in north Africa there has been increasing discussion over the transfer of responsibility of sovereign debt, contracted by a dictator, to the citizens of the nation. We all know how some African countries have suffered from these practices in the past, with the extravagant lifestyles of their leaders being in stark contrast to the extreme poverty of the citizens, who, ultimately, are responsible for the impossible repayment of debt.

The thing is, this is all part of the game. What makes money for the lender is the interest on these loans, NOT that they be payed back in full promptly. "Miss a payment... GOOD, we'll charge you fees, these will be added to the original principal on which you will be required to pay more interest."

The whole system of sovereign debt only profits the private banks from who the loans ultimately come.

HOWEVER, the very interesting aspect of all of this, is that, in theory, the same logic can be applied to our western "democracies". How responsible are YOU, as a tax paying citizen, for the debts incurred by those who claim to represent you in government? What about the debt that has been carried on since before you could vote?

This all makes for some very interesting debate, and will be interesting to follow indeed!

the Billmeister

reply to post by trustnothing


amazingly - i was discussing the general issue of the ` debt industry ` yesterday over drinks [ several drinks - so the debate became heated ]

but my wiew / argument was [ and is ] that

1 - no debt should be transferable - by a solvent insitution , they supposedly made the assesments and accepted the risks - and should accept the repercussions - after all all ads for consumer financial services cary the caveat " the value of investments may rise or fall "

2 if point 1 is rejected , and debts are sold - they should be sold at full value , not discounted for cents on the dollar - if a creditor is prepared to sell a debt to a third party for less than its value - why will they not write off that percent of the debt ? [ the answer IMHO is corruption and croneyism ]

of course one might ask - why would i pay $1000000 for an IOU of $1000000 , the answer is of course compound interest , if the debt has a 5% interest rate - and is actually repaid in 10 years time - you will make > $200000 profit

my bottom line - the sale of debt at a discount - is a corrupt practice

reply to post by ignorant_ape


This guy stands to make 97 million profit minus court fees, he paid 3 mil for a 37 mil debt and is suing for 100 mil, 2 things which strike me are
1. there should be a limit on exaclty how much you can try and recover for a debt which you have purchased for next to nothing.
2 there should probably be a law (like in the UK consumer market) where a debt can only be collected for so many years before written off. (5 yrs Scotland/6 yrs UK) This may in turn lead to more responsible lending and less economic terrorism.