Inquiry into Athens airport operations

A judicial inquiry into the operations of the Athens International Airport (AIA), and the contract for its construction, may delay government plans to list the company on the Athens Stock Exchange. Lower court prosecutor Sophocles Logothetis, who also works for the Special Investigations Service, the body responsible for financial crimes, yesterday launched an inquiry into the AIA administration following media reports that the company lacks an internal audit unit and that Hochtief, the company that built the airport and a major shareholder, has been contracting jobs through various subsidiaries in a far from transparent fashion. Logothetis’s investigation will extend into the terms of the contract signed between the Greek state and Hochtief in 1995 for the construction and management of the airport. A power play among shareholders appears to be behind the recent revelations. Toward the end of 2003, ABB, the Swiss-Swedish engineering conglomerate that owned a 5 percent stake in AIA, offered to sell its stake to Hochtief, as the latter had right of first refusal. Hochtief refused to buy, for reasons it did not disclose. ABB then sold the shares to Horizon, a company belonging to the Kopelouzos group. Hochtief was opposed to the sale and petitioned an arbitration court in London, asking it to nullify the transaction and de-register the shares involved. The AIA, where the Greek state holds 55 percent, declined to join Hochtief in the procedure, arguing that such differences ought to be settled in Greek court. Earlier this week, Hochtief notified AIA that the arbitration court had ruled in its favor and had slapped a fee of 600,000 euros on AIA for court costs. The AIA board has until mid-August to decide whether to accept the ruling. According to sources, Hochtief is concerned over a possible alliance between the state and Horizon, whose owner, Dimitris Kopelouzos, is a former New Democracy MP and is known to have close ties to the government. It has also emerged that Hochtief retains only a 27 percent share in AIA, having sold 13 percent to various funds, although it retains its full voting rights. The same sources believe that Hochtief, which has recouped its investment much faster than expected, may be planning to cash out altogether.

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