Greek Fraud Probe over Postal Bank Loans Nets Three Suspects
At least three people including a prominent businessman have been arrested in Greece in a probe over unsecured loans from ex-state Hellenic Postbank, authorities said on Thursday.
An anti-corruption magistrate ordered the arrests late on Wednesday in connection with loans issued by the postal bank about a decade ago, a justice source said.
In addition to the businessman, who is under police guard in hospital, two former Hellenic Postbank executives were also arrested and warrants were issued for another four possible suspects, a police source said.
The state-run Athens News Agency said that according to judicial documents, the losses are said to exceed 400 million euros ($549 million).
An unsecured loan is particularly advantageous to the borrower since no guarantee or collateral is required.
Greek authorities have begun getting tough on corruption, bringing to light the extent of fraud before the economy collapsed in 2010.
A minor but well-capitalized lender, Hellenic Postbank took a serious blow in 2012 from a restructuring of Greek sovereign debt.
Its shares were suspended last summer after a run by shareholders following statements from the finance minister that the bank had become "unsustainable".
It was eventually absorbed by Eurobank, one of Greece's four biggest banks.
Among those targeted by the probe is former Hellenic Postbank chairman Angelos Filippidis, who is currently abroad but has promised to return to face questioning.
"All the loans were issued with unanimous decisions by the board and all the procedures were respected," Filippidis told Skai Radio on Thursday.
"If I could turn back time, I would issue them again today," he said.
He also claimed that the Hellenic Postbank's bad-loan ratio was far lower than that of other bigger Greek banks.
The Greek banking sector underwent radical restructuring and consolidation last year under the terms of the country's bailout deal with the European Union and International Monetary Fund.
All four of the main Greek banks, National Bank (NBG), Piraeus, Alpha and Eurobank, underwent a process of recapitalization and acquired most other smaller rivals, including a nunumber of French and Cyprus subsidiaries.
Source: Agence France Presse
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