ECONOMY

Marfin challenging OTE boss

Marfin Investment Group (MIG) the second-biggest shareholder in the Hellenic Telecommunications Organization (OTE), called for an extraordinary shareholders meeting of Greece’s biggest phone company to challenge Chief Executive Officer Panagis Vourloumis. Marfin Investment said it requested the meeting to demand an explanation for OTE’s -2.8 billion buyout of Cosmote Mobile Telecommunications and its sale of directories unit InfOTE. The meeting should also discuss «issues of transparency and corporate governance,» the Athens-based fund said in an e-mailed statement. «The management of OTE has recently been taking critical decisions on the future of OTE without even asking the opinion of shareholders,» the fund said. «OTE Chairman and CEO Vourloumis is at the service of shareholders and not their master.» The 17 percent stake in OTE built up by the buyout fund since August is worth about -2 billion. Andreas Vgenopoulos, founder of the fund and co-vice chairman, is backed by main shareholder Dubai Group Ltd, a government-controlled investment company in the United Arab Emirates. OTE’s share price has more than doubled since his appointment. Yesterday, the shares gained 24 cents, or 1 percent, to -24.68, valuing the business at -12.1. Cosmote bid The company owns 90 percent of Cosmote, the most profitable unit, since announcing a public offer for the 32 percent stake it didn’t already own last month. Cosmote’s chief executive officer quit in September before the bid, after disagreeing with Vourloumis over strategy for the mobile-phone company. Marfin Investment wants details of a -2.7 billion loan OTE took out to fund the purchase of Cosmote shares, including fees paid to advisers, the statement said. It also wants details on investment-banking fees paid by OTE in last week’s sale of InfOTE to Rhone Capital LLC for -300 million. OTE spokeswoman Deppie Tzimea declined to comment. Union supports MIG Today’s move was welcomed by OTE’s union, OME-OTE, which has locked horns with Vourloumis in the past over job cuts and changes to work rules that let the company fire and hire workers more easily. «Regardless of MIG’s ambitions, we believe that the issues which OTE management is called upon to answer and the need for a shareholder meeting is extremely important,» the union said in an e-mailed statement. Vgenopoulos said last week he’d like to increase MIG’s stake in OTE to as much as 20 percent to capture more of its earnings. The holding complicates the Greek government’s stated aim of selling some of its 28 percent stake in OTE to a European telecommunications operator. An attempt earlier this year foundered on government insistence on maintaining management control. As chief executive officer of Marfin Popular Bank Public Co, Vgenopoulos tried to take over two Greek banks in January this year in a bid to create the largest lender in the country. The bid failed. Marfin Investment raised -5.2 billion in July, the biggest share sale in the region this year, and seeks to invest in healthcare, leisure, energy, utilities and real estate. Its portfolio of investments includes Greek food company Vivartia SA, Greek ferry operator Attica Holdings, as well as a Hilton Hotel in Cyprus and a Serbian real estate company. Marfin Investment said its relations with the Greek state are «excellent» and that it wouldn’t block any decision made by the government. The fund said Vourloumis hadn’t informed the state, OTE’s main shareholder, of decisions to buy out Cosmote minorities or to take out the loan. «Our initiative to have shareholders make decisions on the company’s critical issues is completely logical and legitimate,» Marfin said.