In Greece, the Banking Chief Draws Scrutiny (ΕΜΠΛΟΚΗ ΠΡΟΒΟΠΟΥΛΟΥ ΣΕ ΜΕΓΑΛΟ ΤΡΑΠΕΖΙΚΟ ΣΚΑΝΔΑΛΟ!)

Posted on 17/10/2013 από

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To some extent, the Proton transaction gets at the essence of what has made Mr. Provopoulos such a polarizing figure here. Pulled together quickly at the end of 2009 and early 2010, the deal drew upon the central banker’s crisis management skills and showed his willingness to make a chancy bet in the hope that the payoff of a more stable banking system would justify the risks. But it also shines a not-so-flattering light on the murky give-and-take among bankers, business leaders and government officials that has long been par for the course in Greece and that many believe lies at the root of the country’s economic collapse.

At the time, Mr. Lavrentiadis was sitting on over 2 billion euros of debt. Piraeus, under Mr. Sallas, was looking to unload its 31 percent stake in Proton, which it had acquired in 2008.

The deal, as Mr. Provopoulos saw it, would solve two problems: it would give Piraeus a needed infusion of cash and the shaky Proton a new owner who promised to invest in and stabilize the institution.

The Proton deal was announced on Dec. 29, 2009. The next day, Mr. Lavrentiadis wired 71 million euros to Piraeus, according to the prosecutor’s report — even though the sale had not been formally approved by the central bank’s regulatory division.

As weeks passed without a nod from regulators, Mr. Lavrentiadis became worried that he would never gain control of the bank. Mr. Lavrentiadis told prosecutors that he met with Mr. Sallas, the Piraeus chairman, in late March and said that he had decided to pull out of the deal.

“Don’t do that,” Mr. Sallas replied, according to Mr. Lavrentiadis’s account. “Let me call my good friend George Provopoulos, and he will do what is needed to get this deal cleared.”

A few days later, the central bank approved the sale.

Piraeus Bank, in a statement, said: “The allegation that Piraeus Bank or its chairman intervened inappropriately to facilitate the sale of Proton Bank shares to Mr. Lavrentiadis bears absolutely no resemblance to reality and reflects the diversionary defense line recently concocted by Mr. Lavrentiadis, a full 28 months after he was initially charged.»

At the root of Mr. Provopoulos’s defense is his view that at the time of the deal, in March 2010, Mr. Lavrentiadis had a strong enough reputation as a businessman to be approved as a new bank owner in Greece. This was not, however, an opinion that was shared by the head of Cyprus’s central bank, who rejected an attempt by Mr. Lavrentiadis to buy a bank in Cyprus during the same period, contending his finances were questionable.

In retrospect, Mr. Provopoulos said, he accepts that Mr. Lavrentiadis was a bad actor. But he rejects the criticism that the Proton sale and Piraeus’s Cypriot deals reveal any favoritism to his former employer or Greek banks in general.

“My first and only priority is to ensure the stability of the financial sector,” Mr. Provopoulos said. Mr. Sallas of Piraeus was prepared to take risks that others were not, he added.

As for Mr. Lavrentiadis, he continues to protest his innocence.

“If I am guilty,” he said recently to government prosecutors, “then so are Mr. Sallas and Mr. Provopoulos.”

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