ECONOMY

How historic tobacco firm is now on the way to becoming history

The beginning of the end for Keranis, Greece’s historic listed tobacco industry which is now occupied by unpaid workers, coincides with its 80th anniversary. Stathis Asvestis, who served as managing director and general manager for more than three years before resigning in August 1998, has a clear view of the causes of the demise. «The basic causes for the collapse are two: mismanagement and stock market scams that were played on the back of the company, the workers and shareholders,» he says. When assuming his post in January 1995, Asvestis, who had served as senior manger in Dow Hellas for 33 years, embarked on a gradual rehabilitation plan which included a voluntary retirement program, as the company had four times the number of workers actually needed. He also proposed a renewal of the antiquated equipment and the creation of an ultra modern plant in the Thebes industrial park. The rehabilitation plan began bearing fruit and operational losses fell from 1.3 billion drachmas in 1994 to 900 million in 1995, 300 million in 1996 and nil in 1997. The year 1998 was the crucial one, as Keranis was well placed to move into the black. The brands of British American Tobacco, which the company manufactured and distributed in Greece, were doing well and exports were on the upswing. All this time, Asvestis kept reminding Emmanuel Kyprianidis, the company president who owned 52 percent of Keranis after marrying the daughter of one of the founders, that he had to prepare his succession. But in August 1998, after returning from his summer vacation, Asvestis was told by Kyprianidis that he had transferred his majority interest to «an offshore company of my own abroad.» Political meddling Asvestis now recounts that, prior to this, he had noticed political figures often going in and out of Kyprianidis’s office in the company’s headquarters on Korai Street in downtown Athens. A few days before the extraordinary general meeting (EGM) of September 1998, Asvestis was thunderstruck when he received a telephone call from someone claiming to represent Rubicon Finance and control 52 percent of Keranis’s share capital. To date, he had received no other indication of the change in the company’s ownership status. At the EGM, Asvestis received a list of names which Rubicon Finance proposed as the new board of governors. The list includes Sifis Glyniadakis, a politically appointed head of the Athens Water and Sewerage Company (EYDAP), and Christos Rokofyllos, a former minister of the then ruling PASOK party. In the years that followed, the company changed dozens of boards of directors and a great deal of money flowed in from share capital increases. Even though Keranis returned to the red, this did not prevent it from holding lavish receptions, even inviting the prime minister. In July 2002, management accused former company president Arthur Frey and former vice president Nikos Aggelidakis of embezzling 500 million drachmas which had been transferred to the Panamanian offshore company Taigas. On April 18, 2005, the Athens Stock Exchange decided to temporarily suspend from trading Keranis’s common and preferred stock until the company provided detailed information on the likely impact of an earlier Development Ministry decision to annul a previously approved share capital increase. The company has since thrashed out a business plan which envisages the sale of its historic plant in Piraeus and a new share capital increase. Meanwhile, the 120 workers, who have not been paid for four months, have occupied the building, and the Capital Market Commission has recommended striking Keranis off the list of publicly traded companies. The house in Lagonissi, south of Athens, in which Kyprianidis still resides today, was bought from former dictator George Papadopoulos and initially belonged to Aristotle Onassis.