Bond probe continues

The investigation into the sale of an allegedly overpriced bond to a pension fund is likely to be wrapped up by the end of next month, the official heading the probe told MPs yesterday as authorities shut down the stockbrokerage at the center of the scandal. Giorgos Zorbas, the head of the committee formed to combat money laundering, said the investigation was focusing on the sale of a 280-million-euro Greek government bond to the civil servants’ auxiliary pension fund. «I am investigating whether the commission [on the bond sale] generated unlawful earnings,» said Zorbas. The pension fund allegedly overpaid some 5 million euros for the bond. Zorbas said that investments by three other pension funds may also be investigated. «The investigation will certainly be extended to other funds if there are indications that criminal acts have been committed,» Zorbas told the parliamentary committee. Opposition MPs pressed Zorbas to reveal details of the probe but he refused. Meanwhile, the Capital Market Commission (CMC) said that it was revoking the license of the Acropolis brokerage, which sold the controversial bond to the civil servants’ fund. The CMC said it had examined transactions conducted by Acropolis between 2002 and 2006 and found that it had breached stock market regulations and posed a risk to investors. Specifically, the market watchdog said that Acropolis had been consistently overcharging pension funds. The brokerage denies any wrongdoing. The bond issue has become a growing problem for the government, with the opposition accusing it of complicity in an arrangement between pension fund boards and brokers that resulted in profits from bond sales at the expense of the funds. Sources said that Prime Minister Costas Karamanlis was concerned about the splits within his Cabinet that have been caused by the affair.

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