HRADF privatisation fund experts’ released

5 June 2016
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All six consultants of the Hellenic Republic Asset Development Fund (HRADF) that were summoned before an Athens magistrate to answer to charges of corruption were released after their testimony on Friday.

The six experts, among them three foreigners, had been brought before the Corruption Magistrate in connection with the sale-and-leaseback contracts brokered by HRADF for 28 state-owned property assets in 2013-2014. All six denied any criminal liability in the case.

The six, who were charged with breach of trust over the deal, based their defence on the argument that their advice was not binding for the HRADF board, which took the final decisions, and that they did not handle public money. They also consider that their advice to HRADF concerning the transaction was beneficial and fully legal.

The case concerns 28 real estate properties belonging to the Greek state that were transferred to HRADF for exploitation via sale-and-leaseback contracts for a period of 20 years. The transaction was concluded in May 2014, following a unanimous recommendation by the experts’ panel and a decision by the HRADF board, as well as a full investigation by corruption prosecutors acting on a complaint filed by Piraeus laywers.

It consisted of two sale contracts and 28 sale-and-leaseback contracts for 20 years, with the Greek state and the two contractors (Eurobank Properties and National Pangaea) as the contracting parties.

The overall sale price for the contracts was 261 million euros, while the Greek state undertook to pay an annual lease, which for the first year came to 25.5 million euros.

The charges against the six experts and three board members of the HRADF at that time are for breach of trust, aggravated by laws on public-sector embezzlement. The last concerns failure to pay interest exceeding 100,000 euros after collecting the sale price and failure to pay this, along with any interest due, into a special public-sector account within 10 days. The three foreigners are from Spain, Italy and Slovakia, where the first two were heads of the land agencies in their respective countries and the third was head of the Slovakian stock exchange.

According to the investigators, the three experts should have recommended amendments to the terms of the transaction to protect the interests of the state but instead advised the board that the procedure followed benefited the state. The corruption prosecutors’ report found that the process was not in the state’s best interests and exposed it to financial losses of at least 580 million euros. They also referred to “odious terms” in the lease contracts, by which the Greek state incurred damages that could not be determined beforehand, including the state paying the lease on empty or partly-empty properties and undervaluation of the properties.

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