Claudia Calleja
Puttinu Cares to pay €350,000 in bank interest
A charity that gets an annual donation of €4,666 from HSBC Bank Malta said yesterday that it pays the bank €55,000 in annual interest on a loan it took to support cancer patients receiving treatment in the UK.
The Puttinu Cares Children's Cancer Foundation, which took the loan a few months ago to buy three apartments in the UK to host Maltese families undergoing treatment, are being charged a subsidised commercial interest rate of 6.1 per cent.
This means that the interest on the 10-year loan of €896,000 reaches a grand total of €350,000 over the whole period, the foundation said in a statement it issued to clarify a number of issues raised by articles in other media. A series of questions was sent to HSBC yesterday to establish whether the 6.1 per cent interest rate was normal for such loans.
The bank, which operates the HSBC Cares for Children Fund, was also asked to explain how it donated money to Puttinu Cares on the one hand but then took €55,000 in annual interest on the other.
However, the questions remained unanswered and an HSBC spokesman said the bank was processing the questions through the legal department as there were issues of client confidentiality that had to be seen to.
Puttinu Cares said it had used the loan to buy all the furnishings of the three apartments in Sutton, which were officially inaugurated recently.
Certain media, it said, had confused the Puttinu Cares Children's Cancer Foundation, a totally independent non-governmental organisation, with the HSBC Cares for Children Fund.
"These are two completely different entities with different aims. It is also important to point out that neither HSBC nor the HSBC Cares for Children Fund had anything to do with the purchasing of the Sutton apartments. This venture was solely the initiative of Puttinu Cares and HSBC happens to be the bank that loaned us the money."
The loan was being paid through donations, the foundation said.
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9 Comments
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albert debono
Nov 17th 2008, 09:15
@ Liam Kelly - charities work is supported by a strong belief and an actual experience in the power of providence. As far as I know Puttinu cares are not saying they cannot pay...simply putting things straight...the service is needed, the people using the service are happy with it, the Maltese society believes in it ...but lets be fair and give fair credit to those who deserve it fairly.
once again
well done Puttinu cares people and keep it up!
Liam Kelly
Nov 16th 2008, 10:39
Didnt the charity agree to the terms of the loan when it took it in the first place?
If the charity choose to be as irresponsible as to buy something they totally and utterly cannot afford, then to be honest its the charities management that we should be questioning, not HSBC, who has came through with flying colours the recent banking crisis.
M Aquilina
Nov 16th 2008, 09:51
And then at the end of the year HSBC comes in full force and tell us that it made millions of profit, so they cannot afford to help this charitable organisation and waive the interest. Shame on you HSBC...
lgalea
Nov 15th 2008, 22:58
SHAME ON YOU HSBC. AFTER GETTING MIDMED FOR A SONG AND USING OUR MONEY TO MAKE VAST PROFITS ANYONE WOULD HAVE EXPECTED YOU TO HELP AND DONATE THE APARTMENTS YOURSELF AND NOT CHARGE THEM SUCH EXORBITANT INTEREST RATES.
AGAIN, SHAME ON YOU.
J Martinelli
Nov 15th 2008, 22:49
Irrespective of who took the loan, there are some basic facts:
1. This loan cannot be considered as a mortgage loan (charged at mortgage rates) since the property purchased is located out of the country, therefore technically HSBC is unable to secure the loan with the building or chattels located in another country whose laws may very well prohibit any foreclosure by a foreign bank.
2. It would be quite noble if indeed large businesses in Malta made substantial contributions in order to shorten the life of the loan.
3. It is not uncommon for Charitable organizations or not for profit associations to take out loans for any worthwhile project. A bank cannot give loans at unreasonably low rates because then it could be argued that other borrowers who are charged normal rates would indirectly be subsidizing the preferred borrower.
J Farrugia states that he smells a rat and that an inquiry is in order. Maybe he should approach HSBC personally and make some inquiries himself. Such a trip would be very educational.
Zap Branagan
Nov 15th 2008, 21:25
€896,000 for furnishings for 3 apartments? I think I could have furnished them cheaper. Are the toilets made out of solid gold?
J Farrugia
Nov 15th 2008, 13:30
I smell rats in all this. An inquiry is not out of order at this time.
Joseph Stafrace
Nov 15th 2008, 10:12
It seems that this organisation which is doing sterling work for families with children undergoing cancer treatment will be in the red for quite some time.
How about some Business organisations pooling together to settle these outstanding debts. Organisations such as Polidano Bros, Gasan and Tumas Group can make a lot of difference!
A Zahra
Nov 15th 2008, 10:02
NOW HOw IS THAT FOR CSR. As a minimum one would expect a normal morgage rate for such a noble cause.