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LEY 57/68

The Shocking Truth

The Banks &
Savings Banks


Bank Guarantees
in Spain


LEY 57/68
English & Spanish


Explanation of
LEY 57/68

OUR MISSION
TO RECOVER OUR OFF-PLAN DEPOSITS
PAID IN GOOD FAITH TO CLEYTON GES SL
& CAJA DE AHORROS DEL MEDITERRANEO

Email:  fpag@btinternet.com

Caja de Ahorros del Mediterráneo - CAM Bank (Banco CAM)

Bank of Spain Governor Miguel Ángel Fernández Ordóñez called
the behaviour of the CAM executives "scandalous" and said the
bank was "the worst of the worst" (Lo Peor de lo Peor) at a
press conference in September 2011



CAM Bank are the financial entity funding the Las Higuericas, Finca Parcs project.

CAM Bank issued Bank Guarantees to 'selected' purchasers on all 5 Phases of the project.

CAM Bank failed to issue Bank Guarantees to FINCA PARCS ACTION GROUP members.

CAM Bank knowingly accepted off-plan deposit funds and failed to demand the
issuing of the Bank Guarantees as required by LEY 57/68 Article 1.2

CAM Bank was aware that their name and logo was being used in all the
Finca Parcs advertising.

CAM Bank was aware that a clause in every Finca Parcs Sales Agreement
(Contrato de Compraventa) stated:



The CAM Bank website states:



CAM Bank state that they carry out financial operations in accordance with current
legislation and best banking practice, however this is certainly not the case with
Finca Parcs as CAM Bank and their client Cleyton GES SL have clearly acted contrary
to the requirements of LEY 57/68 Article 1.1 and 1.2


The 'Our Commitment' page of Mediterranean CAM International Homes website states:



So CAM International Homes make a commitment that they will only market properties
which comply with the requirements of LEY 57/68 Article 1.1 and 1.2:

".......we only market properties built with the mandatory insurance policies on their construction and
which PROVIDE BUYERS WITH SECURED BANK GUARANTEES TO SAFEGUARD THEIR INVESTMENT"

However, from the evidence at Finca Parcs, it is clear that when CAM Bank fund a developer and
a construction project such as Cleyton GES SL / Finca Parcs they knowingly accept millions of Euros
in off-plan deposits and fail to demand the issuing of the legally required Bank Guarantees as
required by LEY 57/68 Article 1.1 and 1.2

CAM Bank are clearly guilty of gross negligence and have shown a total lack of professional
due diligence in this matter.

CAM Bank have offices in many countries of the world including a UK Office in
Charles II Street, London.  The UK branch of CAM Bank was registered with the
Financial Services Authority (FSA) from 30 March 2007 until 7 August 2008.
The FSA website gives the current status for CAM Bank as: No longer Authorised.
When you put your mouse over the words 'No longer Authorised' the FSA provides the
following advice:
"Describes a firm that has been authorised at some time since 1 December 2001 but is no
longer authorised. Do not start to do business with a firm that is no longer authorised"

FINCA PARCS ACTION GROUP OFFICIAL COMPLAINT TO CAM BANK

31 July 2008 - Original 8 group members make complaint to Fernando Martinez Hernandez,
Director of CAM Bank in Murcia.  Fernando Martinez Hernandez failed to acknowledge the complaint.

10 October 2008 - Original 8 group members make complaint to Mr Aurelio Enrique Pedros Vaya, Director,
CAM Bank, London Representative Office.

6 January 2009 - 2 of the original 8 group members have meeting with Mr Aurelio Enrique Pedros Vaya
at the CAM Bank London Representative Office.

4 February 2009 - Original 8 group members present 100 page complaint file to CAM Bank,
Defensor del Cliente department in Alicante.

3 December 2009 - CAM Bank complaint escalated to highest level within the Bank - to the
President - Modesto Crespo, CEO - Roberto Lopez Abad,
Director CAM Legal Department Alicante - Nicolás Muñoz,
Director CAM Legal Department Murcia -
José Antonio García Pallarés & Sub Director Oficina 0346 - Enrique Soler Lapuente.

Caja de Ahorros del Mediterraneo Merger Announced

Four Spanish savings banks announced on Monday 24 May 2010 they would merge a part of their operations to form the country's fifth largest lender, amid concern over the solidity of the country's savings banks.

Cajastur, Caja de Ahorros del Mediterraneo (CAM), Caja Extremadura and Caja Cantabria informed the Bank of Spain of the creation of the new banking group, which will have 135 billion euros ($167 billion) in assets, 2,300 offices and 14,000 employees.

CAM and Cajastur will hold 40 percent each, Caja Extremadura 11 percent and Caja Cantabria 9 percent of the new entity.

The four will retain their boards of management and office networks, while combining functions such as risk control and credit assessment.

The merged entity would be Spain's third-biggest savings bank after La Caixa and Caja Madrid. The plan was expected to be approved by the shareholders of the four savings banks.
 

Spain May Take Over CAM After Merger Talks Fail

MADRID—Ailing Spanish savings bank Caja de Ahorros del Mediterráneo began discussing its possible nationalization with Banco de España - the central bank - on Thursday, after its merger with three small peers fell apart late Wednesday.

A spokesman said the Alicante-based savings bank, or
CAJA, is presenting the Bank of Spain with a new business plan and an application for money from Spain's state-financed Fund for Orderly Bank Restructuring, also known as FROB. He declined to say how much money the bank, known as CAM, needed, but analysts calculate that it would be enough to give the FROB control of more than 50% of the bank.

The nationalization of CAM would be the first since the Spanish government, under pressure to shore up international confidence in the health of the country's banks, in February set new minimum capital requirements. It said it would take equity stakes in those institutions that weren't able to raise new money. The Bank of Spain estimated that 12 banks would have to raise a total of €15.15 billion ($21.4 billion).

The confidence-boosting exercise, however, fell flat, as many independent analyses said Spanish banks would need much more capital. Moody's Investors Service, for example, estimated that banks would need between €40 billion and €50 billion.

The failed merger, which fell apart late Wednesday, comes at a delicate time for Spain. The government is stepping up overhaul efforts and has allayed concerns that Spanish lenders could be hit by the deepening crisis in neighboring Portugal. Spain's borrowing costs have stabilized and have come down slightly in recent months, whereas investors have continued to dump bonds of the smaller Iberian neighbor.

CAM, Spain's 10th-largest lender, was in advanced talks to merge with smaller peers Cajastur, Caja Cantabria and Caja Extremadura that would have formed Banco Base, the country's sixth-largest lender.

The would-be partners had become increasingly concerned about CAM's solvency. These worries led provisional management to request €2.78 billion from the FROB, nearly twice the amount that the central bank had estimated Banco Base needed to satisfy new minimum capital requirements.

Such a hefty capital injection would have implied a significant dilution to stakeholders and given a large holding to the state-financed fund.

CAM's three former partners have started new merger talks among themselves, a Caja Extremadura spokesman said. As they are relatively small entities, they could explore the possibility of adding other cajas to their group, he said.

The breakup of the Banco Base merger "raises, once again, concerns on the amount of losses" in the Spanish banking system, said BPI analyst Carlos Peixoto.

These concerns are especially acute regarding Spain's mutually controlled cajas. With their close ties to local communities and governments, Spain's cajas have born the brunt of the country's housing bust.

Banco Base was forced last week to abandon plans to hold an initial public offering, primarily because of CAM's large holdings of properties on the Mediterranean Coast, ground zero of the country's housing collapse.

Other cajas have encountered similar difficulties to raise funds from private investors. A key test for confidence in the industry will be the success of the offering of the largest caja, Bankia, a lender with €344.5 billion in assets, scheduled for this summer.

Javier Diaz-Gimenez, economics professor at the IESE business school, said he thought CAM's request for a capital injection from the FROB would be the first of many. "The FROB will end up needing to pay out substantially more than the amount originally estimated," he said.

Spain's FROB has invested €11.56 billion into the country's savings banks, given in the form of loans. It has an additional €4.5 billion on hand to invest but can raise up to €99 billion through state-backed debt issuance.


Bank of Spain Takes Control of CAM

The Bank of Spain took control of the Caja Mediterráneo (CAM) savings bank after the markets closed on Friday, paving the way for possible nationalization. The move came after CAM's directors asked for intervention, said Economy Minister Elena Salgado.

The orderly bank restructuring fund (FROB) was expected to fire the administrators and appoint new managers, according to Bank of Spain, which added that the new institution will be renamed Banco CAM. Salgado told Efe news agency that the central bank would inject 2.8 billion euros and approve an additional 3-billion euros line of credit to assure the bank's liquidity.


"All of the measures adopted today are geared at stabilizing and guaranteeing the normal operations of the CAM Group so that it can meet its obligations to third parties," reads a Bank of Spain statement. "Account holders and creditors can now remain absolutely calm."

Earlier this month, the FROB rejected a request from the board of directors who asked for 2.8 billion euros in public funding to meet solvency requirements.


The Bank of Spain put CAM on a list of banks that were expected to ask for government funding to meet the new core capital requirement of 8 percent of risk-weighted assets, or 10 percent in the case of weaker lenders.
 

Bank Of Spain Offers To Cover Up To EUR20 Billion Of CAM's Future Losses - Report

Published September 18, 2011


Dow Jones Newswires

The Bank of Spain is offering to sweeten the deal for potential buyers of ailing savings bank Caja de Ahorros del Mediterraneo (CAM.MC) by covering CAM's future losses for up to EUR20 billion, which is the estimated book value of the entity's real-estate asset portfolio at risk, El Mundo reported in its Monday Internet edition.


In late July, Spain's Fund for Orderly Bank Restructuring, or FROB, which is controlled by Spain's Central Bank, took over the management of CAM and is now preparing to sell it in an auction.


Among the interested parties are Banco Santander SA (STD), Banco Bilbao Vizcaya Argentaria (BBVA), La Caixa and Basque savings banks, according to El Mundo.

 

Spain Willing to Pump Up to $27 Billion Into CAM,
Mundo Says

By Esteban Duarte - Sep 19, 2011 6:34 AM GMT+0100

Spain’s banks rescue fund may cover as much as 20 billion euros ($27.2 billion) of potential losses at Caja de Ahorros del Mediterraneo (CAM), El Mundo reported, citing sale documents sent to potential buyers by the nation’s central bank.

The cash injection would be through a so-called “asset protection” program, which would protect the new owner of the bank from losses due deterioration of asset value or defaults, El Mundo said.

Spain’s CAM Says More Than Half of Developer Loans in Default

By Charles Penty - Bloomberg - Sep 22, 2011 10:20 AM GMT+0100

Caja de Ahorros del Mediterraneo (CAM), a Spanish savings bank seized by the Bank of Spain, said more than half of its loans for property development were in default.

Of 12.7 billion euros ($17.2 billion) lent to developers, 6.4 billion euros were classed as doubtful, the lender said in explanatory notes to its first-half earnings published late yesterday. Another 1.3 billion euros of those loans were classed as “substandard,” the lender said.

The Bank of Spain is looking for a buyer for CAM, which was seized in July. It posted a 1.14 billion-euro first-half loss as its default ratio more than doubled to 19 percent since December.

Selling the stricken lender is a priority for the regulator as it seeks to bolster confidence in a banking industry pummeled by defaulted loans to developers. Auditors KPMG said yesterday that the bank’s viability depends on the success of a plan put together by the government’s rescue fund.

The Alicante-based lender said 5.4 percent of its 1.1 billion euros of mortgage loans to individuals were in default. Property development and business-services loans accounted for 29 percent of its loan book, the lender said.

28 / 09 / 2011 - FROM SIMPLY NETWORKING:

Former head of CAM Bank faces accusations of fraud

Former Director General is accused of fraud and accounting irregularities


The former Director General of the CAM bank, María Dolores Amorós, is to be fired by the Banco de España for suspected fraud and irregularities in her management of the company, according to reports in the financial and economic newspaper "Expansión". She was removed from the top job in August, but has still been receiving her salary, which was 593,040 per year (almost 50,000 euros per month).
 

The Banco de España is now administering the affairs of the stricken bank, and has discovered that Ms Amorós and her predecessor, Roberto López Abad, presented false calculations of their own pension payments.
 

Ms Amorós is also accused of presenting false company accounts: the accounts she signed at the end of June showed a profit of 81 million euros and a repayment default rate of 9.5%, but subsequent audit procedures have shown a loss of 1,136 million euros and a default rate of 19%.
 

The auditor's report also comments on the excessive lending undertaken by the bank under Ms Amorós, often to companies whose creditworthiness was highly doubtful. On taking over the bank's affairs, the Banco de España had to inject 2.800 million euros immediately just to keep it afloat.
 

Sabadell Buys CAM for 1 Euro as Spain Banks Bail Out Caja

BLOOMBERG - December 08, 2011, 4:38 AM EST

By Charles Penty and Emma Ross-Thomas
 

Dec. 8 (Bloomberg) -- Banco Sabadell SA agreed to acquire stricken Spanish lender Caja de Ahorros del Mediterraneo for one euro in a deal financed and guaranteed by Spain’s commercial lenders as an effort to shield the national budget from losses.
 

Spain’s deposit-guarantee fund, which is financed by the country’s banks, will first inject 5.25 billion euros ($7 billion) into Alicante-based CAM. The impact on Spain’s budget will be “nil,” as the deposit fund will also guarantee losses arising over the next decade, the state bailout fund said.


The deal will create a lender with 166 billion euros in assets, Spain’s fifth-largest, combining Sabadell with a savings bank that was seized by the Bank of Spain in July after souring property loans wrecked its business. Spanish bank mergers are gathering pace, with Banco Popular Espanol SA announcing a 1.35 billion-euro takeover of Banco Pastor SA in October.


“The first impression is that this may be quite a good deal for Sabadell,” said Antonio Ramirez, an analyst at Keefe Bruyette & Woods in London.


Sabadell
said in a presentation today that the “game- changing deal” will save more than 300 million euros a year, increase its client base to 5 million and add to earnings per share. Sabadell may close about 300 branches, Chief Executive Officer Jaime Guardiola said on a conference call.

Sabadell shares rose 6.5 percent in Madrid to 2.92 euros at 9:35 a.m. local time, outpacing the 0.8 percent gain by Spain’s main IBEX 35 Index.


Budget Shielded


The sale allows Spain’s central bank to remove CAM from public ownership as it seeks to speed up consolidation in a financial system burdened by 176 billion euros of troubled assets linked to real estate. CAM ran up losses of 1.73 billion euros in the first nine months of the year.


Spain
, fighting to rein in the euro region’s third-biggest budget deficit, said in October that any losses arising from its overhaul of banks would be borne by the financial industry’s deposit-guarantee fund rather than by the taxpayer. It followed up on Dec. 2 by increasing banks’ contributions to that fund in a move criticized by the Spanish Banking Association as “surprising and unjust.”


That deposit-guarantee fund will guarantee 80 percent of losses that may arise from 24.6 billion euros of problem assets, after existing provisions of 3.9 billion euros, Sabadell said.


Troubled Assets


Those troubled assets include loans to property developers, refinanced mortgage loans to individuals and some loans to small and medium-sized companies linked to the building and real estate industry, an official from the FROB said yesterday. He said independent auditors estimate losses of 5.5 billion euros at CAM, a lender that rose and fell with the Mediterranean-area real estate boom.


The FROB is providing liquidity guarantees of 12.5 billion euros, Sabadell said. Those would be used, for example, in the unlikely event that the European Central Bank stopped its liquidity operations, the FROB official said yesterday.

CAM faces debt maturities of 6.37 billion euros next year, 3.24 billion euros in 2013, and 4.36 billion euros in 2014, according to data compiled by Bloomberg.


Government Control


The central bank threw out CAM’s managers in July and placed the bank under administration of the government’s bank bailout fund, which injected 2.8 billion euros into its business and provided a further 3 billion-euro credit line to keep it operating. The figure of 5.25 billion euros to be provided by the deposit-guarantee fund includes that 2.8 billion-euro cost, FROB said.


CAM’s ratio of defaults to loans hit 21 percent in September, more than double the ratio it had last December, as more than half its loans to property developers went bad.


Mariano Rajoy, Spain’s prime minister-elect after winning elections on Nov. 20, has pledged to accelerate a cleanup of the country’s banks that has so far cost 17.7 billion euros. He has asked for at least two studies on how to create a so-called bad bank to buy soured assets from lenders at a discount, two people with knowledge of the matter said on Nov. 25.


The Bank of Spain seized Banco de Valencia SA, the latest of seven lenders to be either seized or taken over by the central bank, on Nov. 21. The lender with 24 billion euros of assets had been under inspection by the Bank of Spain because it had fallen short of new minimum capital requirements for lenders put in place by the government this year.

 

Email: fpag@btinternet.com

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