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Alter TV boss arrested

22 November 2011 / 19:11:46  GRReporter
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The economic police have arrested Costas Yanakos, executive manager of the Greek television station, Alter, for unpaid VAT of € 1.2 million. He was taken into custody from his home in the Athens suburb of Voula late on Monday, just hours after he had a meeting with Minister of Finance Evangelos Venizelos at which they had discussed the indebtedness of the company Free TV (Ελεύθερη Τηλεόραση), which manages Alter. Criminal charges were subsequently brought against him.

The financial problems of the Greek media came to light about a year ago, when the television’s property was attached for the first time. Original programmes thinned down, old films and serials were shown constantly, budgets have been reduced to a maximum, but this has not helped rescue the television much. Media employees have not received salaries since January, and in August 2011, Alter had to resort to paragraph 99 under the bankruptcy code to be protected from lender claims. In total, the liabilities of the television to external lenders and banks equal € 550 million, short-term loans are € 380 million and long-term obligations reach € 170 million.

The programme for the financial recovery of the company included 58% reductions in employees’ salaries. A large part of the obligations should be covered by increasing the company's capital and to cover the rest of the debts, Alter has applied for a loan of € 60 million. The court has taken into account the difficulties of the television station and in August, it gave the media one-month´s grace to negotiate with creditors. Debts now total more than half a billion and the bankruptcy is dragging along with it several advertising agencies that have invested in the television, but will not be able to get their money back.

The stone, which upset the apple cart, is the speech of former Prime Minister George Papandreou to the PASOK parliamentary group in the middle of October. In it, he referred to the suspect operating system of the banks, trying to justify his election statement, "There is money" and the collapse of his government. He also said then, "How can a bank lend to television channels, owing over € 500 million, and not give loans to small and medium enterprises?" Papandreou did not name the troubled television station, but his statement has scandalized the public and prosecutor Eugenia Kivelou ordered an investigation into Alter TV finances. Then, huge obligations of the company to the public sector were found and hence the arrest of Costas Yanakos. A trial and even imprisonment will follow if the businessman fails to pay the obligations to the state.

Next in line, after the failed media, is the well-known Greek newspaper Eleftherotypia, which is also in serious financial difficulty. Bogged down in debts, the media management applied for a supportive loan from Alpha Bank earlier this month, but it was not approved. Greek blogs, citing inside information, read that when the boss of Mania Tegopoulou publishing house called the head of Alpha Bank Yannis Kostopoulos, he just hung up. The time of easy loans in Greece is over and banks no longer provide funds with the ease known from the past decade. The outstanding liabilities of the company total about € 3.2 million and are mainly to the staff of the media. It employs about 800 people and it is not clear how this number is supported. The newspaper employees have not received salaries since August this year and have therefore announced another strike.

Meanwhile, not only media are under the scrutiny of tax police. The arrests continue and the latest news is that a 55-year'old building contractor, owing more than € 1.7 million in taxes to the state, has been arrested. It is not yet clear whether the state will be able to collect its debts or will simply fill up prisons with failing payers.

Tags: EconomyCompaniesAlterBankruptcyTelevisioEleftherotypia
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