Proton Bank propped up amid embezzlement probe

Greece gave support last month to a small private bank chaired by a former US ambassador amid an embezzlement probe targeting several bank officials, Finance Minister Evangelos Venizelos said on Wednesday.

The minister said that the decision to bolster the bank, Proton Bank, on July 14 one day before EU-wide bank stress tests, was dictated by ”state interests” owing to a risk of ”negative effects” on the Greek banking system.

“To protect state interests, it is necessary to ensure the smooth, unhindered and safe operation of the bank regardless of its shareholder composition, management or persons directly or indirectly linked to it,” Venizelos said in a statement.

The ministry also released a letter by Venizelos to the national audit office on July 14 in which he warned of possible negative effects” on the Greek banking system if Proton Bank ”found itself with a financing gap.”

A day earlier, Greek daily Eleftherotypia had reported on a one-day emergency 100-million-euro Greek state deposit to Proton Bank ordered by Venizelos over the objections of two ministry officials, who had warned that the bank might be unable to repay the money.

Greek media have reported that a special prosecutor is investigating a 51-million-euro withdrawal at Proton Bank which Bank of Greece sources have described as ”unusual.”

Proton Bank, where the 2007-10 US ambassador to Greece Daniel Speckhard is non-executive chairman, has said it will cooperate with the authorities while one of its key shareholders, 39-year-old businessman Lavrentis Lavrentiadis, has denied any wrongdoing.

The probe has so far determined that the money was lent to Greek-based pharmaceutical group Alapis – where Lavrentiadis, the founder of Alapis, was until recently a main shareholder – financial site alleged in a report on Wednesday.

Lavrentiadis’ bank accounts and that of seven other bank officials have been frozen pending the results of the probe, reports said.

Proton Bank has a network of 30 branches in Greece and 3.8 billion euros in assets in March. It was not among Greek banks submitted to last month’s EU stress tests, held to determine their resistance to a big shock in the financial system.

Proton Bank has received more than 300 million euros in state capital injections and guarantees since 2008, the finance minister said.


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