Labor Minister Savvas Tsitouridis demanded the resignation late yesterday of the members of the executive board of the Civil Servants’ Auxiliary Pension Fund (TEADY) over the purchase of a bond that the fund allegedly paid a stockbroker firm –5 million too much for.

Sources said that a Labor Ministry investigation found that the TEADY board could be culpable for the pension fund’s loss because it did not specify whether the purchase of the bond should be made within a specific price range.

The bond was purchased from the Akropolis stockbroker firm for –75 million but it should not have cost the fund more than –70 million, according to the investigation, which will be made public next week.

The Capital Market Commission partly suspended the operations of Akropolis earlier this month because of suspicions that sold the bond to TEADY at an inflated price. The pension fund has also begun legal action against Akropolis, which denies any wrongdoing, over the sale of the bond.

Sources said that it is also likely that Agapios Simeoforidis, TEADY’s president, will tender his resignation soon. Simeoforidis is the son of New Democracy’s former general manager and the government is concerned that the affair could turn into a full-blown scandal.

PASOK leader George Papandreou said that the affair had the “suffocating stench of a scandal” and accused Tsitouridis of not applying enough oversight on pension funds.

“The government has not hidden anything,” said Tsitouridis. “If anyone is responsible, we will find them and prosecute them.” The minister pledged that changes would be made to ensure that the financial dealings of pension funds will be more transparent in the future. He later called for the TEADY board members to resign.