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Politics

Libra Group Working Closely with Piraeus Bank

October 22, 2017

ATHENS–After the resignations of ten senior executives at Piraeus Bank, the Financial Times reported that allegations have surfaced of “irregularities” in a loan package sale worth €1.2billion (about $1.4 billion) at a major discount to Libra Group, owned by the Logothetis family.As the Financial Times reported, “Libra paid €300million [about $354 million] for the loan package in 2014 after borrowing €200million [about $236 million] from Piraeus to finance the transaction, according to three people with knowledge of the deal.” There was no official announcement from the bank about the resignations which took place between July and September of this year.Non-performing Greek shipping loans valued at €1.1billion ($1.3 billion),renewable energy loans at €80million (about $93 million), and personal loans of €30million(about $35 million) held by the 10 executives were part of the loan package.The alleged transfer of some loans by the bank to offshore companies in Cyprus and the British Virgin Islands may have violated the capital controls which began in the middle of 2015, the Financial Times reported.

A portion of non-performing shipping loans belonging to Marfin, a subsidiary of Piraeus Bank, was sold back to the original borrowers with a 50% discount, sources told the Financial Times.An anti-corruption prosecutor is looking into the deal that was conducted by the Greek central bank, the Times reported, to determine whether any wrongdoing occurred.

Piraeus Chief Executive Officer Christos Megalou was appointed this year to help the bank’s restructuring and improve the running of the institution, told the Times that“the loan package had been fully provisioned in the bank’s 2016 accounts,” and said, “The recent findings in the Bank of Greece audit while embarrassing, do not commercially impact the bank. The past breaches of the regulatory framework are ring-fenced, have been provisioned for, and have been adequately reflected in the bank’s financial statements.”

A Libra Group spokesperson denied any wrongdoing and said, “we have an excellent relationship with Piraeus Bank and are working in close collaboration with the current management team, in whom we have great faith. As part of our major investment in Greece, we have substantial and performing borrowings with the bank,” the Times reported.

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