Awfull practices of spanish property developers

LoadingFavourite

This topic contains 9 replies, has 4 voices, and was last updated by Profile photo of Anonymous Anonymous 7 years, 12 months ago.

  • Author
    Posts
  • #54553
    Profile photo of Anonymous
    Anonymous
    Participant

    Interesting article today about who a spanish property developer (Martinsa Fadesa) modified some ledger account postings in order to show profits in 2007 instead of the real loses.

    For example a land valued at 336.000 euros was posted at a false value of 65 million euro. A 19.000 % increase!

    http://www.elpais.com/articulo/economia/Martinsa/apunto/revalorizaciones/terrenos/19000/elpepueco/20081208elpepieco_2/Tes

  • #88461
    Profile photo of katy
    katy
    Spectator

    Said that some land was overvalued by 19,000% Sorry to say it but I told you so when they went into administration. Seems as though there were some “bent” accountants too.

  • #88472
    Profile photo of Anonymous
    Anonymous
    Participant

    This is creative accountancy. The oldest book in the trade. It was the responsibility of the Auditors to have queried the valuations of the land the work in progress, finished units etc.

    If this happens to be the case the shareholders & creditors should be suing the Auditors for negligence or fraud if the auditors were in cahoots.

  • #88476
    Profile photo of katy
    katy
    Spectator

    Doesn’t bode well for anyone hoping to get any money back 🙁

  • #88480
    Profile photo of Anonymous
    Anonymous
    Participant

    Katy: For what its worth over/under valuation does not affect the buyer.
    Generally speaking the valuation is done for the Banks for lending or for the audited accounts in order that a fair view of the company assets could be ascertained.

    In, my experience when a company goes down. Its for reason that they are insolvent & cannot meet their day to day financial commitment.

    The, only exception that I have come across was in the 80s with the Liquidation of a bank called BCCI, where everybody was paid in addition to lawyers & Liquidators creaming off, ten of millions of Pounds.

    This was a political decision and no relevance to solvency.

  • #88481
    Profile photo of katy
    katy
    Spectator

    It affects the buyer if they have paid 30% deposit and have become a creditor. Won’t be much money in the kitty with those overstated assets.

  • #88482
    Profile photo of Anonymous
    Anonymous
    Participant

    Katy:
    If the banks have any assets the first charge holder normally the Bank will get their hands on it first i.e. they would be secured creditors. So if the bank has lent £100 on asset that was valued as £200. Than it turned out that the value was say £75, the bank as secured lender will lose out due to under valuation.

    When I & you buy & put down our 30%, we don’t ask for banks asset valuation & even though these valuations are historic & we are not secured creditors.

  • #88483
    Profile photo of katy
    katy
    Spectator

    However you put it do you think the buyers who have an uncompleted apartment or one not even started will get any money back?

  • #88486
    Profile photo of Anonymous
    Anonymous
    Participant

    Katy, the truth of the matter is they will not get anything as they unsecured creditors. Technically speaking over/under valuation is no relevance to the buyer. The one who will directly be affected and I repeat directly is the Bank.

  • #88555
    Profile photo of Anonymous
    Anonymous
    Participant

    😳 I am involved with the martinsa fadesa case and am trying to get the el pais newspaper you quoted up in english but i am not having any luck opening it in english my spanish is very limited any advice please. we have just returned from spain lawyer says put it in the back of your head and get on with life it will take years to solve if ever. bank gaurentee useless in martinsa fadesa’s case . i am certain we english would not get away with the way the spanish treat us i thought it was a level playing field now we were in all eu. i was alarmed by the things the lawyer said about the possible outcome of this case . and i think it is wrong that the case will be heard in la carona fadesa’s local area and not in madrid were we might have got a better outcome. 🙄

You must be logged in to reply to this topic.