Greece probes central bank head over alleged leak

19/11/2017

Της Kerin Hope

Greece’s central bank governor is under investigation by an anti-corruption prosecutor over the alleged leaking of an auditor’s report on Piraeus Bank, a troubled Greek lender accused of violating capital controls imposed at the height of the country’s financial crisis.

According to two people with knowledge of the case, Yannis Stournaras, the governor, is accused of “violating his duties” by leaking an internal document produced by the central bank’s audit team detailing irregular practices by former senior executives at Piraeus.

Mr Stournaras strongly denied wrongdoing. He also rebutted an allegation, made last week in Documento, a Greek newspaper, that the central bank “selectively leaked” the Piraeus report as well as an earlier report by the Single Supervisory Mechanism, the European Central Bank’s bank supervisory arm, detailing poor governance at Attica Bank, a small Greek lender.

“I have full confidence in the competence and the conduct of the Bank of Greece staff. There was absolutely no leak of the audit on Piraeus and not a word of the text has appeared in any media,” Mr Stournaras told the Financial Times.

Details of the report on Attica Bank appeared in Greek media “only after [the report] was circulated to cabinet ministers and the 300 members of parliament”, he added.

The prosecutor’s investigation of Mr Stournaras is at an early stage and it is not yet clear whether he will face charges, according to the same people.

Last month 10 senior executives at Piraeus resigned amid alleged involvement in the sale of loans worth €1.2bn to Libra Group, a New York-based family-owned conglomerate. Some loans were allegedly transferred to offshore companies in Cyprus in violation of capital controls, raising concerns about possible fraud and money-laundering. The executives who resigned all deny wrongdoing.

Documento has also taken aim at Mr Stournaras over alleged gaps in an annual declaration of assets that Greek politicians and bankers are required to submit to parliament for checking.

A front-page story published on Sunday claimed that the central bank governor understated the size of his family’s holiday home on the Aegean island of Syros and twice failed to declare that it included a 15-metre swimming pool.

For the Greek tax authorities, ownership of a swimming pool is an indicator of significant personal wealth that can justify the launch of a probe into possible tax evasion.

Mr Stournaras denied wrongdoing over his asset declaration.

A special investigation in 2015 by Zoi Konstantopoulou, then the Speaker of parliament, of Mr Stournaras’s annual statements did not throw up any irregularities concerning the Syros property, according to a person involved in the probe.

Mr Stournaras stated: “I want to assure [Documento] that I will continue to work in co-operation with the European Central Bank and the SSM for a modern, transparent and effective banking system which complies with European regulations for corporate governance.”

Mr Stournaras clashed last year with the Greek prosecutors’ office over a raid by anti-corruption police against his wife’s businesses premises, arguing that he was the real target. His wife, Lina Nikolopoulou, a healthcare industry consultant, was accused of receiving kickbacks on a public sector contract. An Athens court cleared her of all charges several months later.

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