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Proton Bank - the bank with many friends

12 December 2011 / 20:12:34  GRReporter
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The new revelations in the Proton Bank scandal made by the Bank of Greece supervisors have given a new name to the financial institution founded by entrepreneur Laurentios Laurentiadis - "the bank with many friends." It turns out that the indictment for embezzlement made to Laurentiadis for about € 51 million is just the tip of the iceberg, because the frauds generally made through a combination of commercial transactions and figureheads are ten times larger than the first accusation. The findings of the Bank of Greece supervisors show that the circle of businessmen and entrepreneurs with a common interest related to Laurentiadis’ companies used the bank and deposits of citizens as a personal fund. Greek media report that basic rules for granting loans were not followed; preferential loans for tens of millions were granted to a small circle of friends and acquaintances of Laurentiadis that were used to purchase stakes of Alapis pharmaceutical and other companies, thus putting the money from one pocket into the other.

The data from the investigation indicate that there are additional losses from Alapis management amounting to € 20.1 million, after Proton Bank funded the acquisition of the company’s subsidiaries. Loans to buy side firms to the parent (Alapis) were granted by Laurentiadis’ bank to other companies, in which he had business interests. Deutsche Bank was the adviser to the restructuring of Laurentiadis’ holding and advised him to sell his side businesses and concentrate on the pharmaceutical manufacturing sector, which is expected to develop after the serious reform of the public health insurance system. The advice was followed, but the sale took place in non-transparent conditions and with figureheads. Bank of Greece supervisors have found that Proton Bank provided € 524 million for the purchase of subsidiaries and € 490 million of that amount were transferred to Alapis. Thus, the money of depositors in the bank went into Laurentiadis’ pockets.

Acquisitions were funded at lightning speed and in two days alone from June 7 to 9, 2010, loans worth millions of euros were allocated and the purchases were completed. Due to the short actual term, the companies were unable to complete some procedures formally and supervisors have reported some irregularities. In many cases, the company that purchased any of the subsidiaries of Alapis had been established just days before the real deal. A typical example of the rapid services for "some customers" is the deal with the Sofoklis Rovis’ company Rovinvest. On June 9, 2010 it acquired the companies Provet and Veterinary Supply with funds from a bond issue worth € 57.6 million. Rovinvest management made a formal request for funding to Proton Bank by fax dated June 8, 2010. The lending committee at the Bank approved the loan the same day by decision 1484/8.6.2010 and the loan was granted the next day, June 9, 2010. State auditors have found that the loan was granted without requiring any securities that were submitted much later, on June 16, 2010.

On the same dates and with the same procedure was funded the acquisition of Alapis Medical & Diagnostics by the company Νovo Atreus, which is 99.2% owned by Yannis Bailan. His company was opened with the professional assistance of notary Catherine Peleki, who is known to the Greek public as the wife of former New Democracy minister George Voulgarakis and for her involvement in the Vatopedi scandal a few years ago. Between June 7 and 8, 2010, a third company named Medic was purchased by First Aid Care, which according to the findings of supervisors, had been established just days before the transfer. It was registered on June 1, 2010 by Antonis Rogopoulos. He is CEO of the company Kareyskaki SA, which manages the football stadium of Olympiakos FC and is 50% owned by the now familiar from Proton Bank and Alapis Laurentios Laurentiadis. It turns out that, no matter how things are perceived, Laurentiadis gave loans from his bank to his own people to buy his subsidiaries. The acquisition was funded with € 60 million from Proton Bank and there are similar problems with the above acquisitions as well as with the ability to service the loans and with the processes of their lending.

The same is the situation with Pantelis Davatzis’ company Devtec. He borrowed money from Proton Bank to open the above-mentioned company. Davatzis is an old acquaintance of Laurendiadis because in 2007, he took Biochem Diagnostics from the Alapis group. Three years later, he borrowed from Laurentiadis’ bank €57 million to buy through Devtec another company from the Alapis group - Gerolymatos Animal Health. On June 8 again, the company applied for a loan and €57 million were paid into an account the next day. The same trick in the same timeframe was used for the purchase of Ballis Personal and Home Care from Alapis group by Costas Ballis for €75 million obtained from Proton Bank. The Bank of Greece supervisors have noted that the reports of Deutsche Bank, which was responsible for the internal financial control over the transactions, contained insufficient information. As repeatedly mentioned by the auditors, Deutsche Bank papers contain limited information, insufficient data for the business plans of the companies that borrowed from Proton, no evidence of expected cash flows and the basic condition to approve a bank loan - a documented ability to repay the loan – is not met.

Unclear is the funding of Yiannis Rigas’ holding Sciens, in which the wife of then-CEO Antonios Atanasoglou, Vasiliki Atanasoglou appeared as a law adviser. The subsidiary of Sciens, Sciens Cyprus Properties & Holdings Ltd. was founded on Christmas Eve, December 24, 2010, as an offshore company registered in the Cayman Islands. On the same day, Christmas Eve, a request was submitted to Proton Bank for a loan for € 35 million. It was approved on Wednesday, December 29 and again on the same day, the money was transferred to an account of the new company, although the reason for the loan was submitted two months later on February 21, 2011. It says that the loan is taken for investment in real estate without a serious explanation. The shocking money lending goes on, as Lavrentiadis’ bank lent to the president and major shareholder in the telecommunication company On Telecoms Andreas Rialas. It was worth the small amount of €3.6 million and the supervisors have determined it as a high-risk transaction. Initially, real estate in London worth about four million euros was recorded as securities in the loan contract, but after the payment of the amount, the property had been unilaterally written off from the contract, and the bank silently accepted it.  

Besides the big deals, there are personal services the Bank of Greece supervisors have detected in the transactions of "the bank with many friends." This is the case with the loan granted to the Deputy General Manager of KPMG Spiros Martsekis. It was worth € 320,000 and the Executive Director of the Bank Antonios Atanasoglou recommended the loan granting under very favourable terms of repayment, because as stated in the report, Laurentios Laurentiadis was godfather of Martsekis’ child. The loan was given against a deposit of € 50,000. Friendly relations were obviously important for getting a loan in the case of the basketball player Thassos Delibasakis from the team of Panionios, in which the main shareholder is one of the founders of Proton Bank, Elias Lianos. The basketball player took a loan of € 650,000, which he was unable to repay. Therefore, Elias Lianos deposited € 260,000 to repay overdue interest and principal payments. The supervisors have found that Lianos is both chairman of the bank credit committee and approved the loan for the player.

The actress Vana Barba also seems to have taken advantage from the easy Laurentiadis. She took two housing loans totalling € 388,000 and a personal loan worth € 23,000 against a mortgage on an apartment in the Athens coastal neighbourhood of Glyfada. The area of the apartment is 152 sq m and its market value at that time was € 610,000. The supervisors found that the bank approved the housing loan of Vana Barba once she had entered the lists of irregular payers and had overdue payments on the housing loans and credit cards. The lawyer Alexandros Likourezos, who has one term in the Greek Parliament with New Democracy ballot, received an investment loan of € 563,000 against a mortgage of an office of 175 sq m in the central Athens district of Kolonaki and market value at that time of € 700,000. The property is owned by Adroit Maritime Co Ltd., which gave corporate securities for the loan approval. The supervisors are currently awaiting confirmation on the regularity of this security. Former CEO of Marfin Popular Bank Efthimis Bouloutas had postponed the payment of a loan of € 1.9 million from Proton Bank from September 2010 to July 2011. As Bank of Greece auditors emphasize, the loan is secured by approximately 445,000 shares of MIG, the value of which in the period examined was € 240,000, or only 13% of the loan amount.

Tags: EconomyCompaniesProton BankLavrentios LavrentiadisFraudsFraudulent loans
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