ECONOMY

Gov’t thinks DEKA must be cleansed

The Economy and Finance Ministry is studying a plan to overhaul the State Portfolio Management Company (DEKA), which was much criticized by the ruling party when in opposition as the lynchpin of dubious practices. Sources said DEKA, which was accused of playing a prominent role in an orchestrated attempt by the previous PASOK government to bolster the stock market through large-scale purchases of shares of public companies ahead of the 2000 general election, is in need of transformation and a reorientation of its role. According to the sources, the government will possibly open the «1999-2000 stock market affair» and accompany it with an overhaul of DEKA, which today has estimated reserves of 400 million euros deposited at the Bank of Greece and a stock portfolio valued at around 700-800 million euros. It is taken for granted that the company’s assets will be used to meet public deficits. It is noted that two loans, obtained urgently by DEKA in July 2000 when the stock market was collapsing, are maturing next month. The loans had been obtained with shares of OTE Telecom and Hellenic Petroleum as collateral, and sources at the General Accounting Office say their repayment will cost the public purse around 900 million euros. DEKA’s activities had been the subject of a judicial investigation and a report was submitted to Parliament in September 2000, but the then-ruling majority decided to shelve it. The government has said the case will be opened in the future, but has not specified when. Last month, an Athens prosecutor issued charges of breach of faith against anyone implicated in the alleged malpractices. DEKA was founded in the late 1990s with the aim of contributing to the management and reduction of the huge public debt. It soon appeared to fall into the role of serving the interests of the then ruling party. It still remains unknown how much the agency lost in the stock market as a result of its interventions to prop up the general index. The losses are considered to have largely originated in the partial privatization of several public companies.