Buyback offer made

Financial services group JP Morgan offered yesterday to buy back the state bond that has been at the center of a political scandal in the last month, in a move that could ease some of the rising political pressure on the government. JP Morgan has proposed buying back a structured bond it underwrote and has ended up in state pension funds, after recent allegations from ministers and opposition parties that the transactions were overpriced. The alleged misuse of pension funds has dented the conservative government’s popularity and prompted growing calls for the sacking of Labor Minister Savvas Tsitouridis, responsible for the country’s pension funds. In what is considered to be an unusual move, JP Morgan said it hoped others involved in the bond’s subsequent sale would follow its example, in an effort to protect the interests of both the Greek state and pension funds. «Given the questions that have arisen over what has happened with this bond… our proposal to buy back the bond will reach the best results for all those concerned,» it said. Bankers said the financial services group took the step as means of protecting one of its biggest clients, the Greek government, and to prove that its role in the issue was transparent. An investigation into whether the pension funds were overcharged is currently being held by a committee formed to combat money laundering. Results are expected in May. The government responded to the buyback offer by saying that it will examine the proposal. «The government will examine all aspects of the JP Morgan proposal with the full recovery of any possible financial loss to pension funds from the trading of the bond on the secondary market as the main criterion,» said government spokesman Theodoros Roussopoulos. PASOK MP Vasso Papandreou said the JP Morgan offer is evidence of wrongdoing. «It is obvious that those involved in the (bond) fraud are panicking,» she said.

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