Friday, February 16, 2007

Vultures gathering

Vulture funds are those who invest in difficult situations, such as following a credit default and then squeeze a higher return through a variety of different legal methods. Usually the defaulted credit is a bankrupt company.

However as the Telegraph reports this morning, a Vulture Fund: Donegal International, registered in the British Virgin Islands, has managed to put the squeeze on a deeply impoverished Southern African state: Zambia.

After paying $2 million to the original creditor (in this case, Romania) to gain control over the $15 million credit, Donegal has used a loophole in the agreement to write off Third World Debt to buy a government debt which can be written off by the borrower, and convert it into a private sector debt, which may not. Accordingly Donegal has sued in court for repayment of the full amount plus interest- $28 million.

No, perhaps surprisingly I don't believe that this trade should be banned- that's Capitalism, baby- I would now act rapidly to close the loophole though.

I would, however, like to know the names and affiliations of those who own and control Donegal International.

Personally I would send them to Coventry- boycott them and their firms. This is a nasty immoral deal and those who originated it should be revealed as the unscrupulous and immoral people they are, and then treated accordingly.

A boycott ought to cost the backers of this nasty deal a lot more than they can ever make out of Zambia.

And that's Capitalism too (baby).

1 comment:

Anonymous said...

Cicero see you on the conservative thread.


Lepidus,