EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

05.23.18

Saint-Germain’s Poisonous Legacy of “Toxic Loans”: The Cautionary Tale of SIDRU and Its “Toxic Loans”

Posted in Europe, Finance, Patents at 10:55 pm by Dr. Roy Schestowitz

Summary: The town where the EPO‘s President (Battistelli) is a deputy mayor has a track record of financial hardship and alleged financial misconduct, attributed to the same financial practices Battistelli has just implemented at the EPO

The cautionary tale which follows concerns the Syndicat Intercommunal de Destruction des Résidus Urbains (SIDRU), a communal waste disposal service which is a joint enterprise of fifteen municipalities in the Greater Paris region, including the township of St. Germain-en-Laye.

An official report into the affairs of the SIDRU was issued in 2012 by the competent local public audit body (Chambre Régionale des Comptes d’Île de France). PDF document can be found here [PDF] (local copy [PDF]).

“Between 2003 and 2007, that is to say under Lamy’s chairmanship, SIDRU concluded a number of loan contracts with various banks.”This report confirms that from 1999 onwards the chairman of the SIDRU was none other than the late Emmanuel Lamy, the longtime Mayor of St. Germain-en-Laye from 1999 until 2017.

Between 2003 and 2007, that is to say under Lamy’s chairmanship, SIDRU concluded a number of loan contracts with various banks.

The loans were related to the financing of a new intercommunal waste processing and incinerator facility Azalys located in Carrières-sous-Poissy.

Azalys and Lamy

The Azalys incinerator had initially been financed with a conventional loan totalling around € 49 million at a fixed interest rate of about 5%.

After some time the SIDRU management came to the conclusion that the interest rate was too high. During the period 2003 to 2007 it was decided to “swap” the original fixed interest loan for a number of more sophisticated “structured debt products”. These “structured debt products” took the form of adjustable-rate loans whose interest rates were indexed to the movements of foreign exchange rates between the Euro and other currencies.

Back in 2003, or even in 2007 before the collapse of Lehman Brothers, such “structured debt products” may have seemed like a good idea.

“DEPFA has since been “wound down”. It achieved notoriety in 2008 after it ran into liquidity problems as a result of the economic and financial turmoil in the United States which in turn unleashed shock-waves in the German financial sector and ultimately necessitated a multi-billion bailout of its parent company Hypo Real Estate.”Or at least it was comparatively easier for the snake-oil salesmen pushing them to dazzle prospective customers by exaggerating the claimed advantages while downplaying the risks.

However as chaos and instability engulfed the financial markets in 2008, the unfortunate customers all too often woke up to find that what had been sold to them as sophisticated “structured debt products” had suddenly metamorphosed into “toxic loans” saddling them with dire financial consequences which in many cases still remain to be resolved.

One of the SIDRU loans negotiated by Lamy in 2007 was with the DEPFA Bank, the Dublin-based public-sector financing subsidiary of the German Hypo Real Estate (HRE).

DEPFA BANK

DEPFA has since been “wound down”. It achieved notoriety in 2008 after it ran into liquidity problems as a result of the economic and financial turmoil in the United States which in turn unleashed shock-waves in the German financial sector and ultimately necessitated a multi-billion bailout of its parent company Hypo Real Estate.

“The interest rate of the DEPFA loan rose dramatically in 2011, jumping from 13.35% to 25% in March, then reaching 34% in April and eventually hitting a peak value of 55% in August 2011!”The loan which Lamy concluded with DEPFA for a tranche of SIDRU’s debt was scheduled to run for a ten year period.

For the first year from 15 December 2008 to 15 December 2009 a fixed rate of interest of 3.68% was to be charged.

For the remaining 9 years the interest rate on the loan depended on the difference between the exchange rate of the Euro in US Dollars and the exchange rate of the Euro in Swiss francs and it was to be calculated based on the following formula:

4.68 + 1.7 x max (0; EURUSD – EURCHF)

The arrangement turned out to be catastrophic when instability in the global financial markets unexpectedly led to both a strong rise in the Euro against the Dollar and a strong rise in the Swiss Franc against the Euro.

The interest rate of the DEPFA loan rose dramatically in 2011, jumping from 13.35% to 25% in March, then reaching 34% in April and eventually hitting a peak value of 55% in August 2011!

DEPFA loan interest rates

The fluctuation of the interest rates on the DEPFA loan between December 2009 and December 2014 can be seen in a graphic posted on the website of the opposition group Saint-Germain Autrement.

In July 2011 SIDRU decided to suspend its payments on the DEPFA loan.

“In July 2011 SIDRU decided to suspend its payments on the DEPFA loan.”The controversy surrounding the DEPFA loan and other “toxic loans” dragged on [PDF].

After the local elections in 2014 Lamy was replaced as Chairman of SIDRU by Jean-Frédéric Berçot, the Deputy Mayor of the neighbouring municipality of Poissy.

Following SIDRU’s suspension of payments in July 2011 the matter of the DEPFA loan eventually ended up in court.

“On 4 November 2016 the Court of Appeal of Paris issued a final judgment against SIDRU and ordered it to pay DEPFA all outstanding debts plus other charges which in total amounted to just over € 20 million!”On 4 November 2016 the Court of Appeal of Paris issued a final judgment against SIDRU and ordered it to pay DEPFA all outstanding debts plus other charges which in total amounted to just over € 20 million!

A PDF file of the judgment can be found here [PDF] (local copy [PDF]).

The judgment underlined the personal responsibility of Emmanuel Lamy in the affair.

“The SIDRU is an informed party to the contract, whose director, Emmanuel Lamy, Mayor of the commune of Saint-Germain-en-Laye, ENArque, head of mission for general economic and financial control for the Ministry of Finance, had all the skills required to understand and analyse the possible consequences of both a strong rise in the Euro against the Dollar and a strong rise in the Swiss Franc against the Euro even if such a scenario had been presented as unlikely”.

In a statement published in the “Free Opinion” column of issue no. 697 [PDF] of the Journal de Saint-Germain the opposition group Saint-Germain Autrement spoke in terms of a “damning judgment” against Lamy: “SIDRU: le jugement accable E. Lamy”.

Journal de Saint-Germain Journal 18 Nov 2016

Share in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email
  • Slashdot

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

What Else is New


  1. Saving or Preserving Earlier History of Microsoft Crimes (of the 1990s)

    We're fishing and putting together plenty of old material about Microsoft's crimes that got it in antitrust trouble (Microsoft was found guilty, but it was never split up and Bill Gates went on to bribing the media, reinventing his identity, in effect substituting reality with self-serving fiction)



  2. Links 30/9/2020: 4MLinux 35.0 Beta, WayVNC 0.3 Released

    Links for the day



  3. War Crimes and Bribes

    Reprinted with permission from Debian Community News



  4. The 'Access Watson Tapes': Rare Richard Nixon Tape on Former IBM President and Son of IBM's Founder Engaging in Sexual Abuse of Women

    Arthur K. Watson (son of Thomas Sr.) showed chauvinistic and misogynistic behaviour bordering on the criminal; as a US diplomat he was never held accountable for his actions and efforts were made (going all the way up to the US President) to cover everything up



  5. IRC Proceedings: Tuesday, September 29, 2020

    IRC logs for Tuesday, September 29, 2020



  6. Links 30/9/2020: Nitrux 1.3.3, Tracker 3.0

    Links for the day



  7. [Meme] Is IBM's Proprietary Software Surveillance in the 2020 Election a Form of Corporate 'Meddling'?

    Called after an infamous recipient of a Nazi medal (Mr. Watson), an “app” with secret code and remote logging/recording will be used to determine whether the Orange One gets re-elected



  8. Learning to Say “No!” to Tyrants

    IBM continues with its old and oppressive/repressive agenda, even if this time around it's thinly disguised as "tolerance" and "ethics"



  9. Links 29/9/2020: Fedora 33 Beta, Krita 4.4.0 Beta 2, Stellarium 0.20.3 and Mesa 20.2 Released; 20 Million Downloads From the LVFS

    Links for the day



  10. Another Day of ZDNet Being ZDNet, Calling Windows “Linux” (to Confuse People and Help Microsoft Sell Vista 10)

    Microsoft propaganda site ZDNet is keeping up with the tradition of presenting Windows as "Linux" and promoting Windows even in the "Linux" section of the site



  11. [Meme] It's Crazy Not to Eliminate Lame Words That Might Offend Somebody

    If the word “stupid” offends you, then maybe programming isn’t for you, in the same sense that submitting patches with Git over E-mail shouldn't be hard if/when you can develop decent code with sanity checks



  12. IBM Fought for 'Master Race' and Now It's Banning the Word 'Master'

    A lot of the current push to ban the word "master" came from Red Hat (soon IBM, helped by Intel and Microsoft for the most part); we take a hard look at IBM's history to better understand the incredible double standards and what the real motivations might be



  13. IBM's Founder, Mr. Watson (Yes, That Watson), Had “Very Keen Sense of Public Relations”

    "Watson" is a lot more offensive than those supposedly offensive words IBM is working to purge; think about those hundreds of Red Hat workers who are black and were never told about ethnic purges of blacks facilitated by IBM (their new boss)



  14. Under IBM's Leadership Red Hat Becomes a SPAM Marketing Operation, Sending Mass Mails Without Authorisation and Making It Impossible to Unsubscribe

    Red Hat seems incapable of respecting people's inboxes; it subscribes people to things which they never ever subscribed to and makes it impossible to unsubscribe; what has Red Hat become or succumbed to?



  15. EFF: Sitting on a Massive Pile of Money and Members Are Less Than a Third of the Revenue

    As part of our series which explores non-profits turning against their goals (sometimes in pursuit of money, even if that means sellout) we take a good look at the EFF in this age of unprecedented consolidation of wealth and power



  16. IRC Proceedings: Monday, September 28, 2020

    IRC logs for Monday, September 28, 2020



  17. [Meme] Running Public (or Private) Interest Groups for Profit

    The Linux Foundation is picking up some more ‘surveillance capitalism’ money, in the name of… ‘helping’ Linux?



  18. The Concept of Martyrdom in Free Software and the Threat of Demonisation in the Media

    Leaders or figureheads of public interest advocacy are being dismissed as crazy and rude whilst corporations that maim and kill millions of people are spun as "professional" and even "altruistic"; don't fall for it



  19. More Money Does Not Necessarily Mean More Stable Organisations

    The corporate takeover of Free software (privatising the Commons) is a real problem that nobody in the media seems to be talking about, partly because this media is itself corporate and hence part of (participant in) the 'coup'



  20. EPO Management Looks for New and 'Innovative' Ways to Exploit Scientists and Distract From EPO Corruption

    EPO management is desperate for puff pieces, having just produced some greenwashing nonsense (about a dozen press items about this non-event) and now a bunch of self-promotional videos



  21. Before the New York Times Did a Number on Donald Trump It Changed Bill Gates' Tune

    When you speak strictly through a spokesperson it often means you're lying and/or hiding something; the Gates enigma remains unsolved more than a year later



  22. Links 28/9/2020: Linux 5.9 RC7, Review of Linuxfx 10.6, OpenSSH 8.4

    Links for the day



  23. Speaking Through Spokespeople is a Sign of Weakness, Such as Non-Denying and False Denials (or: Bill Gates Never Denied His Connections to MIT Through Jeffrey Epstein)

    Big liars lie shamelessly; the biggest liars lie through proxies and today we examine the evasive tactics of Bill Gates and his associates (who were closely connected to Jeffrey Epstein but refuse to even talk about that, except indirectly)



  24. IRC Proceedings: Sunday, September 27, 2020

    IRC logs for Sunday, September 27, 2020



  25. Accounting for Debconf 19 Travel... in 2020

    A deeper look or analysis of Debian expenditures, which grew more than twicefold for travel last year



  26. Don't Let Microsoft Make 'Open Source' Synonymous With Proprietary Monopoly GitHub

    Now that the OSI works for Microsoft instead of Open Source (no, GitHub isn’t Open Source; it’s inherently against Open Source) we need to understand the modus operandi and learn from old mistakes



  27. Links 27/9/2020: Puppy Linux 9.5, Nitrux 1.3.3

    Links for the day



  28. Public Relations and Tolerance Stunts Are Very, Very Cheap

    It's 2020 and people are asked to focus on superficial aspects of corporations rather than anything of substance (like the effects on society at large, notably exploitation and long-term harm)



  29. Open to Everything

    It always starts with good intentions...



  30. The OSI's President Apparently Does Not Know That His Own Employer (Salesforce) Works for ICE

    The hypocrisy (or double standard) of the OSI’s President is astounding; taking salaries paid in part by ICE budget (Salesforce works for ICE and similarly evil agencies) while protesting in a proprietary software platform of Microsoft (GitHub) about ICE (all this whilst actively participating in it regardless)


RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

Recent Posts