Bavarian Supply Chamber Gambled Away 700 Million Euros
Bavarian Pension Fund Scandal: Risky US Investments and Allegations of Neglect
The Bavarian professional pension scheme (BVK) is facing scrutiny over risky real estate investments in the US, leading to significant losses and raising questions about oversight.
Allegations of Supervisory Failure:
The opposition CSU alleges that the Bavarian Interior Ministry failed in its duty of supervision.Tim Pargent of the Green Party criticized the ministry for inaction, stating to the Süddeutscher Zeitung that they “stood idly by as pension funds were put at risk in unsafe real estate transactions,” calling it “a serious failure.” The government has dismissed these claims as “baseless,” arguing they are not required to review individual investments.
Concerns from Insured Individuals:
Insured individuals are worried about their retirement provisions. Munich lawyer Peter Mattil, an expert in banking and capital markets law, expressed frustration with the authorities’ handling of the situation to the Frankfurter Allgemeine Zeitung, stating, “They behave as if it’s none of my business and as if the few hundred million were peanuts.”
Details of the Losses:
The BVK recently provided more detailed facts in a confidential committee meeting, as reported by the Augsburger Allgemeine. While total investments amount to 117 billion euros, and pensions are not promptly at risk, the losses are considerably larger than previously reported. Despite this, the lost money will still hurt.
The Shvo Connection:
Initially, the BVK stated investments of 820 million euros in US properties with a write-off of 163 million. It has now been revealed that the BVK invested in properties purchased from convicted tax fraudster and investor Michael Shvo in prime locations like Manhattan, Beverly Hills, and Chicago. These properties, however, require extensive renovations.
Potential Lawsuits:
US tenants are reportedly considering legal action against the BVK.