NEWS

Fifteen to stand trial for structured bond scandal

Fifteen people, including a former Labor Ministry official, are to stand trial in connection with a scandal involving a 280-million-euro government bond sold to pension funds at an allegedly inflated price in 2006.

Ex-Labor Ministry general secretary Evgenios Papadopoulos will face a judge after a council of appeals court judges accepted a recommendation from prosecutor Antonis Liogas.

Other suspects who will stand trial include three executives – Sofoklis and Theodoros Priniotakis and Giorgos Apostolidis – of the Acropolis brokerage house, two employees ? Haris Adamopoulos and Avraam Savidis ? of JP Morgan bank, and two board member from the Civil Servants? Auxiliary Pension Fund (TEADY), which was one of the four organizations that purchased the bond.

A probe was launched into the sale of the structured bond in 2007 after it emerged that four pension funds had bought it at an allegedly inflated price after it had been traded by several brokerages and banks. The affair had threatened to destabilize the New Democracy government before the September 2007 general elections.

In June 2007, investment bank JP Morgan agreed with the pension funds to buy back the bond after the government promised to compensate them for interest they would have earned had the money been placed in a central bank deposit instead.