Company penalized over mishandled yacht funds

 January 24, 2017

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A penalty was imposed on a Monegasque company that had misappropriated the sum of 2,650,000 Euros paid by a client to guarantee the construction of a yacht, reported Monaco Matin. After deliberation the Criminal Court has imposed one of the harshest penalties provided for by law for this breach of trust. The penalty comprised a fine of €90,000 and €20,000 in damages for the civil party. This is a case in point where Monaco Yachting & Technologies demonstrated a flippant use of financial freedom. Originally, the owner of the heritage-focussed company, specialising in yachts and based on the Isle of Man, signed a contract with SAM in 2008. The agreement covered the construction of a 75-meter vessel worth 93 million euros. Clearly, the text provided for possible pre-conditions with regards to the financing which would have put an end to this arrangement.

Vanished assets

At the same time, in order to guarantee the construction of the vessel, the establishment of the Principality required a bank deposit of 5,300,000 Euros from the customer. Logically, once the money was paid, it was blocked. But a few months later, the banking and financial crisis of autumn 2008 began to put pressure on global activity. This worsening situation intensified by the deterioration of economic forecasts disrupted obtaining of the financing that had been committed. As a result, the contract lapsed and the client claimed the return of the funds less the expenses incurred, namely half of the assets.

Strangely, the Monegasque company refused to return the blocked money under the pretext that it would serve to compensate for damage suffered by the retraction. Without waiting, the complainant froze the bank account in question and sent a bailiff to seize the blocked sum. Too late! The SAM had already cast a wide net and the state of the assets did not exceed 700,000 Euros.

“These people are mocking the world”

At the hearing, the President Magali Ghenassia addressed the legal representative of the Monegasque company, for him to explain the location of the missing money and their ability to repay it. He could not provide an answer. In fact, he appeared to be a straw man, lacking knowledge about the case and how the structure operates. Representing the civil party, Mr. Arnaud Zabaldano was shocked.

“Despite the endless debates, the money should not have been touched. These people are mocking the world. Behind the appearance of commercial legitimacy, there was a desire to misappropriate funds. Be careful of the image reflected on the Principality where this company has the right to practice.”

The solicitor claimed 70,000 Euros in fees and 15,000 Euros for moral damages. For prosecutor Alexia Brianti the funds should have been returned to the bearer if the contract was not respected.

“But they were used to settle administrative fees through wages and other benefits. With a president unable to clarify the functioning of his company, there has been a clear infringement and the court does not have much choice: a fine of up to 100,000 Euros.”

“The fault is with the economic crisis”

Mr. Gaston Carrasco, in defence, was indignant at the sum requested and demanded an acquittal.

“The sum of the deposit was an advance on the credit and returned, in half, to the SAM. There was no breach of trust. It is a simple business matter of the owner profiting from an exceptional price. No one is at fault. The fault is with the economic crisis! As a result, the case will degenerate and turn into a settling of accounts.”

What about the diverted sum of 2,650,000 Euros? No loss for the complainant: it was awarded on this occasion by the Arbitration Tribunal of Milan.

Despite the claims of the defence, in this particular case the Monegasque company did not escape the imposition of a penalty for its handling of the funds for the yacht.

Source: Hello Monaco


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