Sunday, December 30, 2012

Meilleurs voeux pour 2013

Le soleil se couche aussi. Naples sur le Golfe du Mexique. Photo ET.

Meilleurs voeux pour 2013 


Je savais qu'un jour je ferai une grande découverte. Je ne me suis même pas rendu compte qu'en effet c'est chose faite depuis un an. C'est le perpetuum mobile journalistique. Imaginez, vous pondez un article et à sa date anniversaire, vous pouvez le reproduire pratiquement tel quel! Il est toujours d'actualité! Imaginez, si vous êtes payé au mot! J'ai inventé l'article crédit-rentier! Faut seulement changer les dates et des chiffres par-ci, par-là.
Sinon, cela reste une rengaine. Voici, mes voeux de l'année passé, remis à neuf (en rouge).



Thursday, January 5, 2012


Aide-mémoire pour les vœux de Nouvel An officiels.









Bonne Année. Même si toutes les lignes à suivre sont claires, 
il y a des ombres au tableau. Photo E.T.
Ce qui est bien quand on formule des vœux pour les priorités luxembourgeoises depuis un autre continent, c'est qu'il faut se limiter obligatoirement à l'essentiel. Avec la distance, les détails deviennent de toute façon insignifiants, sauf ceux qui me concernent personnellement bien entendu. Voici mes 7 vœux pour le Luxembourg en 2012, 2013 (et pour moi-même, là où les deux se superposent):

1. Que notre gouvernement reste chez nous et s'occupe de nos affaires

Élémentaire mon cher Watson? Pas chez nous. Notre Premier se veut la tète de l'Eurogroupe et sauver la Grèce, son Second se veut les jambes dans un Tour du Monde du Conseil de Sécurité de l'ONU et sauver le monde. Mon tout est peut-être la tête et les jambes, mais elles sont ailleurs, pas chez nous. Ce manège est couronné d'apparitions plus ou moins réussies sur des chaînes de télévision, surtout allemandes. Tragiquement, les membres juniors de leur équipe tentent de les émuler de plus en plus souvent en s'y aventurant eux aussi. Chez nous, il y a pourtant pas mal à faire, traduit en chiffres:

15.164, 15.578 le nombre de chômeurs + 4.872 en mesures pour l'emploi, + les frontaliers chômeurs (4.000?)

10.221,94, 12.175,68 en Euros, dette du gouvernement central par tête d'habitant

1500, le nombre d'affaires pénales classées pour prescription depuis 1990 

13 ans, le temps qu'il faut à la justice pour régler le sort de la vache volée au fermier de Mertzig

8, 9 ans, mon compteur judiciaire personnel provisoire

1.086 le nombre de réclamations traitées par l'Ombudsman, d' octobre 2010 à septembre 2011

La raison que ces chiffres sont si mauvais est que ceux chargés de faire le ménage chez nous, préfèrent s'occuper et s'illustrer ailleurs.

2. On ne commande pas un "Tout" et partie d'un "Tout"

Qui trop embrasse, mal étreint. Cette sagesse populaire a été élevée au statut de règle par les penseurs de l'art militaire: On ne commande pas un Tout et partie d'un Tout. Ainsi le général Eisenhower, commandant le débarquement du 6 juin 1944 en Normandie, ne commandait pas en même temps la 90e Division d'Infanterie du VII Corps de la 1re Armée américaine à Utah Beach. Les écoles MBA ont toutes reconnu la valeur de cette règle militaire et l'ont transposée dans la vie des sociétés civiles. Lakshmi Mittal l'applique, car il n'insiste pas à être aussi magasinier en chef à Schifflange.

Cette règle est tellement intuitive aussi, que tout le monde (enfin presque) comprend qu'on ne peut mener de front deux fonctions aussi absorbantes que celles de Premier Ministre du Luxembourg et Président de l'Eurogroupe. Mais notre Premier a déjà compris cela et a dit qu'il resterait chez lui en 2012, 2013. Il a aussi dit le contraire. Et il a aussi dit le contraire, encore. Le Président français devra donc décider pour lui une fois de plus.

D'ailleurs il faut remettre en question ces ambitions européennes, internationales et onusiennes de nos ministres: à force de vouloir jouer ces rôles, les confrontations avec nos voisins se multiplient au point de devenir personnelles. Messieurs Blair, Sarkozy, Steinbrück, Cameron et Madame Merkel ne diront pas le contraire. Ce qui ne peut servir l'intérêt du Luxembourg et de sa place financière. On ne lance pas des pierres dans une maison de verre.

La règle devrait avoir force de loi quand il s'agit de cumuls rémunérés, ardemment convoités par des fonctionnaires. L'exécutif qui est ainsi rémunéré par des intérêts privés fait une moquerie de nos institutions démocratiques et de l'indépendance de l'Administration. Et ailleurs, dans le reste de la vie publique la règle devient une question de pure décence. Cela comprend les syndicats.

Heureusement , et je suis sûr et certain de cela, tout ce monde suivra l'exemple civique du nouveau Ministre de l'Economie, Etienne Schneider, qui non seulement n'acceptera pas de reprendre le siège d'administrateur d' Arcelor-Mittal de son prédécesseur, mais qui a aussi promis de démissionner des trois autres postes d'administrateur qu'il occupait en tant que fonctionnaire (eh oui!), pour "éviter les conflits d'intérêt". Ses collègues fonctionnaires ne manqueront pas de suivre ce bel exemple de civisme et de responsabilité personnelle, et n'attendront même pas que le nouveau code de déontologie promis (si, si c'est pour cette année 2012 encore, donc demain le 31 Décembre) post-scandale de Livange les y oblige dès le début de l'année pour le faire. Il faut saluer le courage et l'honnêteté de Monsieur Schneider, qui se profile ainsi en Homme d'Etat.

3. Revoyons la Constitution

J'ai eu l'occasion (1) de commenter sur les mystérieux travaux qui semblent avoir lieu en vue d'une révision de la Constitution. Elle est bien archaïque, faible, tout au plus un peu gênante de temps en temps. Alors on la change au quart de tour, 37 fois en tout depuis son octroi et la fréquence s'accélère. Je compte 46 articles sur les 121 qui énoncent un principe tout en incluant des restrictions qui permettent d'invalider l'article par des simples lois , voire règlements. Je compte 27 qui me semblent bizarres en cette année 2012, 2013. Bref, notre loi fondamentale ne l'est pas. Elle ne garantit pas solidement la séparation des pouvoirs, les libertés et droits de l'homme. Elle a été pensée et concédée pour être facilement contournée. Je souhaite donc que l'équipe qui se penche sur la malade dans une chambre noire, montre sa face et ses travaux au grand jour pour laisser une place au débat public, et qu'un référendum permette au peuple de déterminer Sa loi fondamentale. Rome ne s'est pas construit en un jour.

4. L'avenir sera transparent, c'est clair

C'est une bonne nouvelle: la loi concernant la liberté d'accès à l'information devrait être votée sous peu. Si, si, sous peu. C'est ce qui est connu internationalement comme FOI, "Freedom of Information". On y a travaillé depuis 11, 12 ans et demi et elle devrait être au point maintenant. Le gouvernement avait des réticences face à la perspective de devoir se livrer à des strip-tease, chaque fois que la presse ou le public exige un accès à des documents. Cela nous permettra de demander où on en est avec cette révision de la constitution, ou avec le stade de Livange. Et mes amis à "Transparence Internationale", qui chaque année publient un index de corruption, amélioreront le score du Luxembourg.

5. Repensons la globalisation

Je pense que tous les luxembourgeois conviennent qu'on a souvent besoin de plus grand que soi. L'adhésion aux projets européens et la globalisation est une nécessité, mais a du bon et du mauvais. Donc mesurons notre enthousiasme. Ainsi l'ouverture des marchés a aidé nos industries, l'acier en premier. Le Luxembourg a habilement exploité des niches de souveraineté qui ont fait éclore des activités bien lucratives: le centre financier, les services radiotélévision, la logistique. Mais il y a eu retour de manivelle: la concurrence globale a ruiné notre sidérurgie nationale, l'UE s'attaque aux niches de souveraineté et ailleurs l'OECD s'occupe du secret bancaire.
La globalisation a aussi permis l'acquisition de quelques fleurons de l'économie luxembourgeoise par des groupes internationaux. Ceux-là ont comme motif soit d'augmenter leur bilan, soit d'acquérir des marchés ou du savoir-faire qu'ils n'ont pas, soit de purement et simplement éliminer tout ou partie du concurrent luxembourgeois qu'ils viennent de s'accaparer. Sans pitié bien sûr pour la perte d'emplois qui accompagnent l'opération. Souvent l'ogre étranger, ayant séduit les actionnaires de la belle luxembourgeoise, commet tous les outrages sur elle, et c'est au gouvernement luxembourgeois, parrain du mariage, de récupérer l'épave déchirée de la belle en cas d'échec: BGL, BIL, Arcelor, Cargolux et y en aurait-il d'autres? Mon vœu: cessons d'être naïfs, ou incompétents.

6. Justice différée est justice déniée

Au Luxembourg la justice est toujours différée, ou pire, classée, faute de moyens et de volonté politique. A la "rentrée judiciaire" en automne, le Procureur Général Robert Biever a confirmé ce que tous les criminels et leurs victimes savent: le Luxembourg est un paradis judiciaire, car la Justice n'a pas les moyens de sa mission. En particulier quand il s'agit de crimes financiers et de blanchiment d'argent. 1.500 affaires prescrites ont dû être classées faute de moyens depuis 1990! Nous connaissons tous l'histoire (presque) amusante de la vache volée du fermier de Mertzig, qui s'est terminée après 13 ans par la condamnation du Luxembourg devant la Cour Européenne des Droits de l'Homme à Strasbourg.

En 2004, j'ai été moi-même victime d'un crime financier et j'ai porté plainte civile et pénale. L'affaire est donc dans sa huitième, neuvième année. Pour en décrire les circonstances et les vicissitudes, j'ai brossé un tableau d'un microcosme extrêmement représentatif du "système luxembourgeois" et qui couvre 2 chapitres dans mes mémoires. Un personnage témoin est décédé entretemps, mais tous les jugements intermédiaires m'ont été favorables. La justice est délivrée en mon cas, mais avec extrême lenteur. Donc mon vœu pour le gouvernement est: restez chez vous et réparez cette justice comme le Procureur Général le réclame et comme les juges de Strasbourg vous ont enjoint de faire à plusieurs reprises. Sans oublier la menace américaine sur les paradis 
judiciaires. Bof, faudra aller 

7. L'Ombudsman, en vrai anti-Kafkaïen, doit être une femme. Voeu exaucé! Le seul!

On a besoin d'un homme à tout faire quand on est trop paresseux, incapable, ou qu'on n'a pas le temps de maintenir ses choses en ordre. Pour notre gouvernement cette personne est donc nécessaire et s'appelle Ombudsman. Il est intervenu 1086 fois en un an, dont une fois pour moi.

C'est au sujet de mon affaire citée plus haut que j'ai sollicité son aide. Attendez, attendez, ce n'était pas à propos des 8, maintenant 9 années de procédures judiciaires. Non, c'est que l'Administration des Contributions s'en est mêlée! Elle a découvert que selon elle je devais des arriérés d'impôt sur des revenus disparus dans l'arnaque. Comme si le fermier de Mertzig devait payer un impôt sur la valeur de sa vache volée! On m'a avisé qu'une procédure de "demande gracieuse" devrait facilement corriger ce zèle fiscal. Cinq kilos de documents à l'appui n'ont cependant pas touché la fibre gracieuse du sieur Heintz, directeur des contributions. L'homme détient le pouvoir finalement exorbitant, arbitraire et inéquitable de dire qui est un cas de rigueur, qui paye un impôt sur des pertes, et d'accorder des crédits d'impôt à millions sur profits au suivant.

J'ai crié "Kafka" auprès de l'Ombudsman Marc Fischbach. Résultat: l'impôt reste dû, mais son payement est différé jusqu'à la fin de la procédure pénale, qui elle est déjà différée. Mais l'administration des contributions est gargamelesque. Comme si elle regrettait sa mansuétude après sa concession, elle est revenue avec vengeance pour amender sa concession: il faut payer 100 € par mois (?), et le solde est frappé d' un intérêt punitif. Pour apaiser le dragon, chaque fois que j'avais l'occasion, je faisais des virements de mon solde entier sur mon CCP, des sommes allant de 88 centimes mensuels jusqu'à € 6.49. Non, non, attendez, il y a du nouveau: l'Administration des Contributions n'a pas d'humour, ni le sens de la parole donnée: elle vient de saisir un résidu sur mon CCP ce 13 décembre. Ah, si je m'étais tu! Avec cela j'aide à financer donc les crédits d'impôt de Monsieur Mittal, Becca et beaucoup d'autres! Je souhaite que la nouvelle Ombudsfra fasse le ménage!

Bonne Année. Vous allez voir, Je ne suis pas sur qu'on est soit sur la bonne route.

(1) Luxembourg: Vers la révision de la Constitution, le 03 novembre 2009: http://feierwon.blogspot.com/2009/11/luxembourg-vers-la-revision-de-la.html

Thursday, December 27, 2012

Breaking News. Help is on the way

http://www.plenglish.com/index.php?option=com_content&task=view&id=842321&Itemid=1

Luxembourg Condolences Reach Cuba

Luxembourg, Dec 26 (Prensa Latina) The government of Luxembourg transmitted its sincere condolences to Cuba for the damages caused by hurricane Sandy in eastern Cuba last October.
In message to Foreign Minister Bruno Rodriguez, Luxembourg counterpart Jean Asselborn expressed her sincere condolences and compassion and their solidarity to the victims' families and relatives.

I ask you to accept, your honor, the certainty that we share your pain in such hard moments.

Diplomatic sources from Luxembourg announced an official contribution of 175,000 euros to fund the projects to help ease the aftermath.

Sandy -a two-degree hurricane in the Saffir-Simpson scale- swept through Santiago de Cuba, Holguin and Guantanamo provinces in pre-dawn hours of October 25th with winds of more than 175 kph, leaving a trail of massive damage, fundamentally, in the infrastructure -on housing, the agribusiness and the electricity and communications grid, plus 11 dead.

ef/emw/ft/mar
Modificado el ( miércoles, 26 de diciembre de 2012 )

Monday, December 24, 2012

Is Luxembourg the Grinch Who Stole Christmas?

       My Orchids. "Puttin on the Ritz:. Photo ET


Is Luxembourg the Grinch Who Stole Christmas?

Annie Get Your Gun! We have to stop the Grinch who stole Christmas again, this time at the Luxembourg House in New York. There will be no Miracle at 17 Beekman Place. Christmas eve caroling at the House was canceled for the first time in 35 years!















    
                                      But Annie's gun is knotted. Photo: Luxembourg's gift to the UN.

Say it isn't so! No White Christmas, no Carols at Irving Berlin's former home? I'm shocked and the New York Post reported: "Silent Night at Irv Berlin's"


Here is an excerpt from the New York Post:

“Every year, through word of mouth, it would get a bit bigger,” said a source. This year’s installment was to include a gig by drag guru Lypsinka.
But international affairs have seemingly interfered with the chorus’ criteria. “The ballroom is now full of tables, and computers, and IT equipment,” says Goldsteinn, whose group was last year given a smaller library in which to perform. Now he’s pulled the plug. He says it was, “so packed, so madcap,” he had to “stand on a kitchen stool.”
Now don't Call me Madam and drag me into the itsy-bitsy teeny-weeny details of the dispute. The culprit is the limitless ambition of some Luxembourg officials who desperately wanted to profile themselves on the United Nations' Security Council. It is a recent Luxembourg syndrome: unbridled international ambition.

Now the Mouse that roared needed to ship the backup team from Luxembourg to New York, all seven of them, (though there is a very tall one), and cram them into Irving Berlins former bathroom and living room. And drill holes and move furniture, a real show. May I remind you that there's no Business like Show Business?

As the former Consul General of Luxembourg who bought the place 23 years ago for the Luxembourg government, I hate to have to come out again and again with my stepmotherly-in-law advice. Couldn't you rent space just across from the UN, commensurate with your ambitions for those two years of world-saving activity? And keep the existing space for ongoing business?

Ooh, the cost of it? After spending millions on getting elected to the UN Security Council in the first place, and on programs such as the Development Program ($413 million in 2013, try to call 011 352 2478 2300 if you need something), Peace Keeping and Kyoto, and for such frivolities as luxury apartments whereas the official residence stays empty, or shuffling around Consuls, because that accommodates a spouse working for a law firm, why get cheap all of a sudden? More in my memoirs, in the chapter: "Puttin' on the Ritz".

Monday, December 17, 2012

2012 was a good year for Europe says Juncker

My Orchids. Dancing Girl Hybrid "Pure Joy in Europe". Photo ET

Wort.lu - 2012 was a good year for Europe, says Juncker

In French: Tout va très bien Madame la Marquise.

How can he say that ? Easy: it is moon-talk. Europa is Jupiter's sixth Moon and in 2012 it was discovered that it actually has a large deep ocean. Water! That's as clear as it gets.





Tuesday, December 11, 2012

Cargoforwarder's simple questions about Cargolux


My Orchids. Photo ET

In an open letter to ministerial duo Frieden-Wiseler, Cargoforwarder today asked very simple questions about Cargolux, and in doing so, provided insight into some of the underlying correspondence about one of the many possible new partners. I would stress once again, that new capital is even more important than a new partner. Can you get both? The better.

Cargoforwarder's article: http://www.cargoforwarder.eu/article.php?id=192

Cargoforwarder's open letter:


Dear Mr. Wiseler and Mr. Frieden,

We kindly ask you to reveal the precise circumstances which made your government decide to choose Qatar Airways as Cargolux’s stakeholder instead of the HNA Group in June 2011. As documents prove (see below), the Chinese group’s financial bid exceeded Qatar Airways’ offer by almost 60 million U.S. dollars. Nevertheless, you and your government opted for the Qatari investor. It would be interesting to know which considerations motivated your administration to accept the lower bid and to conclude the contract with Qatar Airways.

It would be also interesting to know which price you are paying the Gulf carrier for buying back Cargolux’s 35% stake. Finally, we ask you to reveal which amount HNA will have to submit for acquiring the shares. Please be assured that your answer will be published in full length in www.cargoforwarder.eu

Sincerely yours

Heiner Siegmund

Attachments:
1. Letter of “Cabinet d’Advocats” to Minister Claude Wiseler
2. Letter of “Cabinet d’Advocats” to an unnamed addressee
----------------------------------------------------------------------------------------------------------------
Attachment 1:
Cabinet d'Avocats
L-1147 Luxembourg 4, rue de l’Avenir Tél. (352) 22 36 63 Fax (352) 22 36 62
Jacques-Yves HENCKES PAR PORTEUR E-Mail
Claudie PISANA
Avocats Monsieur Claude WISELER Ministre des Transports
Luxembourg, 24 septembre 2010
Monsieur le Ministre,
Concerne : Prise participation de HNA GROUP dans CARGOLUX
En vue de l’importante réunion prévue pour le 9 octobre à Shanghai je voudrais vous signaler que les parties discuteront bien entendu du projet sous son aspect économique et sous son aspect financier.
Quant à l’aspect financier que j’ai discuté avec le CFO (Chief Financial Officer) de HNA, je veux rappeler que HNA est d’accord à acquérir un MINIMUM de 33% des actions de Cargolux voire 49% si le gouvernement le souhaite. …
Quant au prix nous proposons que le prix de vente se fasse sur base de la valeur des actions au 31 décembre 2010. Une première estimation pourra se faire en janvier 2011. HNA veut signer contrat de vente des actions en janvier 2011. Le contrat mentionnera que le prix définitif sera fixé à la valeur des actions telle qu’elle résultera des comptes audités….
For the important meeting scheduled for 9 October (2010) in Shanghai I would like to note that the parties will of course discuss both the economic and financial aspects of the project...
As for the financial matter that I debated with the CFO (Chief Financial Officer) of HNA, I want to reiterate that HNA has agreed to acquire either a 33% MINIMUM or up to 49% of the shares of Cargolux, if the government wishes
As for the price we propose that the selling price is made on the basis of the value of the shares at 31 December 2010. A first estimate can be made in January 2011. HNA wants to sign the contract for the sale of shares in January 2011. The contract will state that the final price will be determined according to the value of the shares as result of audited accounts…
Jacques-Yves Henckes
-----------------------------------------------------------------------------------------------------------------
Attachment 2:
Cabinet d'Avocats
L-1147 Luxembourg 4, rue de l’Avenir Tél. (352) 22 36 63 Fax (352) 22 36 62
Jacques-Yves HENCKES
Claudie PISANA
Catherine THILL-KAMITAKI
Sabine DELHAYE-DELAUX
Avocats Luxembourg, le 6 juin 2011
Cher …,
Concerne: Prise de participation de HNA dans CARGOLUX
Concernant la participation de HNA dans CARGOLUX
HNA a offert d’acheter les actions Cargolux sur la base des comptes de 2010. Cargolux étant évaluée à 500 millions d’USD le prix offert pour 35 % des actions est de 175 millions d’USD.
Par ailleurs durant les négociations HNA a offert de faire un prêt de 100 millions d’USD à un taux de 2% l’an à Cargolux. Ce prêt était accordé avec l’aide de la Banque centrale de Chine qui a donné un accord de principe à ce sujet, pour une durée à discuter. Le but était de réduire les frais de CARGOLUX et d’augmenter sa rentabilité.
Ces offres sont toujours valables....
HNA has offered to buy the Cargolux shares based on their 2010 value. (At that time) Cargolux’s total value was estimated at $ 500 million. So the price offered for 35 percent of the shares is 175 million USD.
Moreover, during the negotiations HNA offered a loan of 100 million USD at a rate of 2% per annum to Cargolux. The loan was granted with the help of the Central Bank of China. (The bank) has in principle agreed to this subject, for a period to be specified. The goal was to reduce costs and increase Cargolux’s profitability.
These offers are still valid…

Monday, December 10, 2012

Spying case in Luxembourg: cherchez la femme



My Orchids: Listening Devices in the Shadows. Photo ET

Spying case in Luxembourg: cherchez la femme

The President of the Eurogroup, who now is a serious candidate for Prime Minister of the Grand Duchy of Luxembourg, a job that has been vacant for several years, recently spent a few hours in Luxembourg for a first training session for his future job. The candidate preferred a "freestyle" test for the first practical session, choosing as a topic an issue initiated by himself two weeks ago: a spying matter where facts and fictions are jean-claudying into one another. But the intent in choosing that subject was really a deception. It was "head fake" designed to hide the lingering fiasco at Cargolux and the true emergency that's the need for its rescue. The feint was also to obscure the real problems and suspicions surrounding the Cargolux case, as well as similar situations in other recent cases. There will even be an Inquiry Commission to investigate the spying nebula, but there won't be any such commission for the economically more serious and more immediate problems and questions surrounding Cargolux, even less for the little older case of the National Stadium at Livange.

Attention! One feint may hide another.

Indeed, my "cherchez la femme" was a double feint, a pretext to attract the reader. You have to admit that it was successful, as you made it up to here. My intent was to break the spell of the spy story and bring you back to the urgent realities. If you thought I would make some juicy revelations about Bond girls, that's not yet. The spy story is a political fiction, but if it is going to keep a life by itself, it needs girls anyway, and we'll eventually find one. So keep posted.

My real goal is to refocus attention on the serious urgency of the moment, the fire in the country's economic bulk of the roof, and the heat Cargolux is taking. Without forgetting to have the Great State Commissioners account for the disaster they commissioned.

Cargolux: let's take the same and start all over again.

Cargolux' catarrh due to the cooling of the relations with Qatar needs to be taken to the emergency room.. A second opinion is needed. But are we seeking a second opinion from the same old doctors who formerly prescribed QR? This is apparently what happens. Ministers Frieden and Wiseler briefed Parliament about their new approach, a treatment in two phases. Though there is no diagnosis yet. But everyone seems reassured. For the moment, the patient does not respond at all, because its decision-making organs are blocked due to the continued participation of QR, still a shareholder.

The two ministers said the first phase would be a maneuver that would release the 35% of shares held by QR into an escrow. Nothing to do with the one provided by ING in 2011 for the sale of CV shares to QR. This time  the ministers insist, it will be "clean and correct." I read those comments reported by the press as an admission that in 2011 the occult escrow operation with ING might not have been clean or correct? But let's for the moment just acknowledge that we have a temporary solution, even if it is born out of this obsession with confidential escrow agreements.

The devil is in the details.

The good news of the redemption of QR shares is good news only if Qatar is actually aware of this, and  is okay with it. There were at least three ways to proceed with the redemption of QR's shares. But a choice has already been made. So here we are with the fait accompli of option three, which is a hybrid between the other two possible redemption methods: a direct sale a or sale to a third party.

As our ministers did not elaborate on the details, we should remember that generally the devil is in the details. In this escrow operation, what are the terms? I guess that QR remains the beneficial owner pending a final sale. In the meantime, does CV have operational freedom? That's essential, without saying that no other clauses detailing the expectations on both sides are not important to avoid procrastination and last-minute surprises when a "closing"  should happen. I'm afraid that none of this is certain by just remembering the previous agreements signed by our ministers, agreements that were completely unbalanced in favor of QR. Did we protect ourselves this time? We are assured and like to believe that transparency will prevail, and certainly will transcend past Luxembourg amateurism. At least this time around, well advised witnesses will be able to watch and make noise, enough to protect the naive from themselves.

However, the negative results of  past amateurism and the incomprehensible deal of 2011 are: CV's present value lies below its real market value, QR cannibalized  CV, and ultimately CV lost some of its excellent reputation. This accumulation of bad news will haunt the current recovery. In addition the turn-around effort is handed over to the losers of the first round, without even asking for any accountability for the first fiasco they created.

The devil will be especially present in the crucial detail of anew valuation for CV, after it underwent two horrible years of damage. This will be a large gap to bridge between buyers and sellers, unless the sellers go again for the lowest bidder. Before choosing the solution of acquiring QR's shares in escrow, there could have been more than a half-dozen ways to pluck this duck. But now there are fewer choices left. We will watch the skills of our negotiators, who in the first transaction had sold to the lowest bidder (!).

By now the range for a valuation of 35% of CV lies somewhere from under the$ 117.5 million paid by QR (after considering incurred damages) to over $ 175 million (HNA's opening bid in 2011). This will be tough, but CV is intrinsically beautiful, with a worldwide tradition. The government cannot and shouldn't avoid providing strong guarantees and even intermediary direct investments to enhance CV's credibility. Mere formality one might think: the government has done so in much higher ratios for banks. What is good for the goose is good for the gander.

What comes first, a partnership or recapitalization?

The Qatari partnership was a mere ownership transaction, without any capital contribution. Hopefully our sorcerer's apprentices never mistook that partnership for a capital contribution. It is clear that the deal served the purpose of allowing the private investors BIP and Luxavantage to exit Cargolux. The result is that in its quest for new capital, CV lost two years. After a surge in revenues in 2010 producing profits, the bleeding resumed as the QR relationship developed..

The reality is that a partnership does not exclude a capital injection, as shown in HNA's offer for a partnership in 2011. Its bid was not only higher than QR's. It was accompanied by a loan of $ 200 million at quite favorable conditions well.  Luxembourg's State corporatism, i.e. bureaucratic decision makers, showed contempt for the Chinese equation that didn't satisfy who knows what needs. Yet among the senior professional staff at CV, there must remain enough collective memory to revive the former vision, positivity, certainty, boldness, it's "You name it, we fly it" mentality, and who could tie up with their former selves and make the company great again.

Actually the new guard at the helm is typical for state corporatism in Luxembourg. Here you have Cargolux, created over 40 years ago. Viewed with skepticism at first, it proved a surprising success. And presto, the Luxembourg "system" snapped it up and put its faithful servants of state corporatism in command, who, incompetent, must turn to partners, consultants, uncles, meandering mechanisms and other hesitation waltzes, thus hiding their inability to understand the problems and to make timely decisions. The State for its part would justify its lack of action and transparency on the grounds that it cannot interfere in the affairs of a "private" company, that it actually owns. This is the sad state of state corporatism.

With the new transparency policies, we will all be at the forefront to follow the future exploits of our ping-pong duo Frieden-Wiseler. (Ping-pong does not infer any bias in favor of any partner). We already know that the public will pay attention and not be silent. What's more, our aspiring Prime Minister promised a Code of Conduct before the end of this year, which would of course apply to the main actors in our drama! I would even add an Inquiry Commission about the former QR deal, because what good is a small code of ethics, if the big questions about the legality of our officials' past actions are not to be investigated?

Tuesday, December 4, 2012

Luxembourg's Great Spying Case: Smoke and Mirrors? But where are the Girls?

My Orchids. Paphiopedilum Clair de Lune. Naples, Florida.Photo ET


Pssssttt! Luxembourg is full of secrets. You want me to tell you? But then I would have to kill you! If a secret went out, it wouldn't be a secret anymore, right?

But I can lift the cover a little bit, For Your Eyes Only, because I can sense that we have special Bonds. You think of Luxembourg as a dull place where overpaid bourgeois are always vacationing in tropical spots? The fact is most are on Her Majesty's Secret Service. On unlimited budgets, with gadget cars, and drinking Martinis, shaken, not stirred, under palm trees. For us, The World Is Not Enough! Like an Octopussy we sneak into worldwide power, with Thunderball at the United Nations Security Council, and Mr. Goldfinger manipulating the Euro. We not Only Live Twice, but like Diamonds, we Are Forever. Those are the reasons for the dark secret maneuvering deep down under the city. The Casemates come alive nightly, dark silhouettes are roping down the fortress walls, black tied snorkelers swim up the Petrusse River and, uninvited, mingle with guests at the FêteNat Party, a real Casino Royale.

But Golden Eye was watching. The reality is that Luxembourg's spies are aging, and are becoming forgetful. Some resort to gadgets to record their own conversations, phone calls, even dreams so to leave notes to themselves. Then they forget what they said, but the gadget is password protected, which they can't remember. And they can't remember who recorded the conversation, and suspicions start to fly. Sometimes it is useful to make those suspicions public. Mr Goldfinger did come out recently with a spy story, in order to hide the Cargolux fiasco story, which needs to be covered up the way the National Stadium fiasco story was covered up.

But in this case Dr. No got his Parliamentary Enquiry. The reason is that no Member of Parliament and no Member of the government is directly suspected of wrongdoings or corruption. Just a bit of lying, but according to Mr. Goldfinger, in politics there are moments where you have to lie. So that's the Truth.

There couldn't be a Cargolux Enquiry or a National Stadium Enquiry, because of the people involved. And indeed a majority thought that way, that everything was transparent. But that was a lie. And that is the Truth.

On December 6th, Mr Goldfinger will tell us all the Truth. In plain cloth, or in St Nicholas garb. Either way, he might have to tell us a lie. And that is the Truth. Tomorrow Never Dies.

In the meantime I'm struggling to get a good story out of this. There are no girls yet in the story. Even not Miss Moneypenny. Can St Nicholas bring one along? Please!

Wednesday, November 28, 2012

Cargolux - Qatar Airways: Anatomy of a forced marriage

My Orchids. Hybrid. Photo ET


Cargolux - Qatar Airways: Anatomy of a forced marriage

By divine intervention or was it a prime-ministerial one, a hallucinating Series B spy story, with a B as in Bommeleeër (the Luxembourg home-grown terrorist saga), is coming along to conveniently hide the final words on the forced and failed Cargolux marriage with Qatar Airways. But the final word on this is that the marriage was a mistake, a wrong solution to a real problem, an unnecessary and superfluous operation, opaque and dubious, abusive and costly. The failed marriage leaves Cargolux a divorcee with more lead in the wings than before.

The sale of 35% of Cargolux finally had no other purpose than to give private investors a way out.

The plan to hook up with an "industrial partner" who would also provide access to capital, without specifying how, was a great theoretical thought. It is this the fragile basis for the erroneous assessment that has been made to get into this partnership.

The reality is that two companies that are active in the same sector are essentially competitors. The thought was that the partnership with Qatar Airways (QR), would produce windfall benefits to Cargolux (CV). It was only a dream devoid of good due diligence, and according to my sources, there has never been much of such a prospect, nor even formal promises from QR. There was only wishful thinking on behalf of CV and its Luxembourg fairy godfathers. In the words of Mr Juncker, the partnership would provide new routes, new customers, new business and new jobs to CV. This assertion was based on no agreement, no business plan. But CV  projected 500-600 tonnes of additional freight per week to hit Findel, and Luxair saw an impact on its future handling revenue, increasing by several million dollars. Not to mention the windfall in cash from the sale of a chunk of its stake in CV.

According to my sources again, due diligence conducted by QR was extensive, but it actually granted no reciprocity to CV and Luxembourg. QR demanded thus by contract to have access to all accounting, commercial, operational, organizational and legal information on CV. No reciprocal demand of this sort was made to QR! I must conclude that up to today, CV does not even know if QR is profitable, who their customers are, any obligations it has to third parties, what its development strategy is in relation to the development of the Doha hub. All of which is essential to understand QR's business and strategy. Indeed, the Luxembourg negotiator, always so keen to hire expensive consultants to draw foregone conclusions, in this case was almost nonexistent.

And the lamentable valuation of $ 117.5 million for 35% of the company is evidence of this incompetence, if not bad faith. A vague reference to the book value of the company was done, but that's not enough to convince ordinary people of the merits of this valuation, worth $ 335 million. Cargolux should have been worth more to a buyer who is almost a start-up operating 4 planes and has been in business for 5 years only. CV has 42 years of experience, more than 1500 well trained employees, routes, customers and markets. At the end of 2010, showing a profit of $ 60 million, there it would not have been arrogant to assign a valuation to CV between $ 500 million and $ 1 billion. The ignored candidate for an acquisition, the Chinese Yangtze River Express / HNA was not mistaken: it offered to open negotiations at a low price of $ 175 million for 35% of CV, certain that the seller would ratchet the price upwards. This was an acquiescence to a valuation of at least $ 500 million. The Chinese candidate even sweetened its proposal with an offer of a $ 200 million loan at 2% interest. On the other hand, QR only vaguely offered to increase its stake to 49% with no indication of price or conditions. The issue of providing additional capital as well as the "synergies" remained cleverly vague and hidden, whereas the focus was on what seemed to be the top priority: liberate the private shareholders, especially BIP and BCEE's investment fund Luxavantage under the best possible and even impossible  conditions. This episode inside the case was detailed in an article by V. Poujol in the Land (1) and is worth to be recalled here.

QR's acquisition of 35%  of CV was a variable geometry transaction.

It was a game mixing common shares and preferred shares, which during a fiduciary operation entrusted to ING Bank, made them appear and disappear like in a Las Vegas Magic show. The transaction, which would probably be illegal in most Western countries, has in fact provided a bonus equivalent to a $ 12.50 dividend, which represents in fact a bonus of about 40% for preferred shares held by BIP and the Luxavantage fund of BCEE, which both were allowed to liquidate all their positions. SNCI and BCEE Bank, which are both owned 100% by the State and Luxair simply converted their preferred shares into common shares at the rate 1:1, so without the gain of 40% that BIP and Luxavantage were given. The State strangely did not own preferred shares itself. The State however, which is us the tax payer, through its holdings in SNCI, BCEE and Luxair did give up capital gains of approximately $ 43 million in the conversion 1:1, but allowed private investors to fully cash in a bonus of nearly $ 7 million, thus discriminating against its own interests.

This is a government that decides who makes a profit.

This is what I call the state corporatism. By privileging QR at the detriment of Yangtze, the State has also decided against the Chinese investor, who had offered $ 175 million for the same participation, which is 50% more than QR, and valued the company at $ 500 million. That's $ 165 million more than CV's valuation in the QR deal. BIP and Luxavantage shareholders who were so eager to get out of there, at the best price I guess, can calculate their shortfall by snubbing the Chinese candidate. About 50%. And don't believe the excuse that exclusive negotiations with QR prevented the Chinese deal from being considered. The exclusive negotiation with QR was limited to the standard three months that lie in this kind of contract between the signature and the "closing".

No one has heard any protests against this discrimination from those governmental  shareholders. BCEE being present in the deal as both a bank and as the Luxavantage investment fund, had to exhibit quite a case of schizophrenia: under the same signatures it had to approve the preferred treatment as Luxavantage and the discriminated deal as the government owned bank. This is evidence that state corporatism tends to promote its most faithful and obedient members to key positions. Leadership through consensus. Need real leadership? Then here comes Mr. Al Baker with QR, who draws the same conclusions as I just did.

Abusive marriage

CV's prenuptial agreement with QR already leaned totally in favor of QR, giving it access to all the secrets and information without any real reciprocity. Mr. Al Baker arrives in Luxembourg in September to consummate the marriage. According to his announced principle that "His Highness kicks ass," he tells the management of Cargolux that they are incompetent and tells Boeing that they sell junk, causing quite a stir and embarrassment, as the first beautiful and festive delivery of a Boeing 747-8 was aborted.

We know the sequence in which CV loses its dowry, its customers, its confidence and its stability. The absence of synergies, of new business and the accumulation of evidence of threats called for common sense to correct the trajectory. Plans in the drawers, or those simmering among various consultants, or simply some existing agreements and decisions made employees fear the worst. And many ideas left no room for any emotional attachment to Luxembourg. They were all numbers. Unions have probably seen the potential trap that existed in a takeover by QR not only in fact, but also formally. For QR could extend its holdings up to 49% of CV. However through Precision Capital's acquisition of BIL it would become shareholder of Luxair, itself shareholder of CV: taking influence was pre-programmed. Even more hidden was the opportunity for total control in the corollary rule that 51% balance of CV should be held by European groups: Precision Capital is a European group.

It was probably impatience and prima donna attitudes that have alarmed many people and put the Luxembourg public on defense against QR. The formal reason for this divorce is in fact superficial and even absurd: QR's candidate for CEO, Mr. Forson has not been accepted by the Luxembourg shareholders, who at the same time they expressed their confidence in him. The reasons are deeper as we know. The Las Vegas divorce lawyer would call it "irreconcilable differences".

Make our divorcee even more beautiful

What a mess. Add to the mess two years of missed opportunities. Of course, nobody bears any responsibility in a system of state corporatism. The State Anonymous denies and dilutes responsibilities. But finally it has to realize, after yet another blunder, that Luxembourg lost much of its economic substance in recent years, and that losing Cargolux would be the final leap into a disaster of great magnitude. Meanwhile CV needs investors because its problem continues to be a question of capital, more than an "industrial strategic partner". In the meantime the state has no choice than to fill the gap, consolidate, save, develop CV.

Regarding the ideal cargo partner, it does not exist. Assuming QR wants to sell its shares, the other shareholders have the right of first refusal. By the end of the day, this will be a kind of auction. So, to get started, who offers the first $1 for QR's shares? But in the meantime QR retains its contractual rights.
If you really need another "strategic" partner, here's a little drawing: would it be better to join forces with someone who is geographically far away, less likely to compete, operates in a large export market in full development, more likely to cooperate, ( not necessarily China), which therefore offers more than this other choice, which is closer, a beginner who has to learn, who wants to build a major airport in Doha, close to his cousins ​​who also want to build the same thing just 50 km away?

(1) http://tinyurl.com/d2vnuk6