The former president of the country’s hotel workers’ pension fund was remanded in custody pending trial yesterday after defending himself against charges of buying overpriced structured bonds that allegedly resulted in 12 million euros in losses for the fund.

Nikos Tsourakis is the first suspect to be remanded in custody since a major structured bond scandal broke last summer. An investigation found that a number of people made illegal profits of some 4.2 million euros from the sale of a 280-million-euro Greek government bond to four pension funds. But no detentions were made.

Tsourakis faces the criminal charge of breach of faith for allegedly buying three structured bonds for 159 million euros through Marfin Popular Bank between 2005 and 2006. Marfin eventually repaid the fund the value of the loan with interest. Still the purchase is believed to have made a 12-million-euro hole in the fund’s coffers.

According to sources, Tsourakis described the charges being leveled against him as “a legal absurdity” and allegedly maintained that the purchase of the bond had benefited the fund.

His testimony provoked a dispute between the investigating magistrate probing the case and an appeals court prosecutor, with the latter insisting that Tsourakis be remanded.

“Justice has proved itself to be very severe to date but we are still hopeful that the investigation will open up and that justice will eventually be done,” said Tsourakis’s lawyer.

As regards the probe into the chief bond scandal that broke last year, developments are expected in mid-July when most of the defendants are due to begin testifying.