November 2, 2011
Over the last 24 hours, sources in Athens have been providing further details on the offshore transactions allegedly involving Piraeus Bank in 2008, and the allegations are not pretty.
The latest report is that the vehicles into which Piraeus Bank allegedly put some €250 million in 2008 were supposed to be for real estate investments, although where any money actually went is not known.
The full list that is now circulating in Greece includes the following names of otherwise unknown offshore vehicles that are alleged to have received funds from Piraeus Bank, with the amounts indicated if known. As reported to us, they are:
- Hadus Ltd - €30 million
- Bratzano Ltd - €30 million
- Bel-Global Inc - €30 million
- Nesfield SA - €30 million (WikiGreeks comment: the names of these four entities are now in wide circulation in Athens)
- Ponte Finance Ltd - €20 million
- Ellensburg - €15,730,943 million (WikiGreeks comment: Ellensburg is unusual in not being a nice round number like the others – perhaps it represented an actual purchase of something.)
- Dealand - €15 million
- Fonblanque - €3 million
- MGS Real Estate - €798,111 (WikiGreeks comment: The small amount involved would suggest some actual real estate transaction, such as the purchase of an individual residential property.)
- MS Ependytiki - €2,500,000 (WikiGreeks comment: For non-Greeks, the work Ependytiki means ‘investment,’ but what kind is not yet known.)
- Med-City - €4,640,371
- Stormont - amount not specified
- Avecmac - amount not specified
- Woodfin - amount not specified
- Invardo - €35 million
- Roots - €17,030,400
- TOTAL: €247,068,485
According to the sources in Athens, who have knowledge of current investigations, the risks associated with transactions allegedly involving these entities are not reflected in the bank’s books. As a result, some investigators believe the transactions should be investigated using the theories applied to Proton Bank’s missing €51 million and any transactions with entities relating to its chairman, Lavrentis Lavrentiadis.
The sources say that if these alleged offshore transactions were characterised as loans, they are not normal loans in a commercial sense, as there is no security for them and nothing has been paid back. They state that some documentation shows them as treated by the bank as “extinguished” despite the lack of repayment. It is this feature of the transactions that has led some people to privately suggest that Piraeus Bank has engaged in activities similar to those used by Lavrentiadis at Proton, shifting funds to offshore entities in bank secrecy havens such as the Caymans.
The sources say that the beneficial ownership of any such offshore entities is not readily apparent, so that the identities of the persons who received the nearly €250 million in funds allegedly provided by the bank remain hidden. There is the suggestion that the bank’s senior officials can explain the background to all of these 2008 transactions, including the beneficial owners of the firms who received them, and can also provide details on the loans that have been made by Piraeus Bank to major Greek publishers, businessmen, and political figures that also remain unpaid and yet have not declared to be in default. Those who have written us have further suggested that one reason so little has been written about Piraeus Bank’s issues is that Piraeus Bank and those controlling it have been major benefactors to Greek media.
Further information has been emerging about the offshore vehicles used by Lavrentiadis at Proton Bank. Proton is reported to have had transactions involving a total of hundreds of millions of Euros in offshore companies with names such as Auriflex, Ausum and Trapezium. The actual owners and beneficiaries of these companies are not visible on bank records, as they are said to be Cayman Islands vehicles used to obscure their actual ownership. The sources also repeated allegations that Proton Bank provided capital that went into Piraeus Bank to one of Piraeus Bank’s shareholders, which if true, would require, at minimum, an investigation to determine whether laws were broken.
In light of this information, and the complex relationships in the period 2008-2009 between Piraeus Bank and Proton Bank, the sources say one can only understand what has happened at Proton Bank by understanding its relationship to Piraeus Bank, and vice-versa. They state the actual condition of both institutions could only be understood through a comprehensive review of their relationships with offshore entities that leads to a full uncovering of the identities of the individuals behind them. According to the sources, this will require Greek authorities to develop an understanding of who made the decisions about the transactions, who benefited from them, and then to make this information public.