Former Greek ATEbank Head Spirited $10 Million to London

ATHENS – The admission by a former chief executive of the former state-run ATEbank that he transferred nearly $10 million of his personal savings to London has set off a political firestorm in Greece after the bank’s assets were given to the privately-run Bank of Piraeus to prevent the Greek bank from collapsing.
Theodoros Pantalakis, former chief executive of Greece’s ATE Bank strongly denied any wrongdoing, claiming that he had declared the transaction to authorities in 2011 and had paid tax on the amount transferred, the Financial Times and other media reported.
“I’m on holiday and I don’t plan to say anything more until I come back to Athens,” Pantalakis told the newspaper from his villa on the Aegean island of Paros. He is expected to testify on his three years at the helm of ATEbank before a Parliamentary committee at the end of August, a source familiar with the problem told the newspaper.

The transfer came at a time when Greek political leaders were imploring Greeks to keep their money in the country during an economic crisis. It is believed that many politicians and business executives, however, have accounts – secret or otherwise – in Switzlerland and other countries to avoid paying taxes. Tax cheats owe Greece some $70 billion.
A government official said Greece came under pressure from the European Commission and European Central Bank to split ATEbank into a “good” and a “bad” bank and sell its healthy assets. “The alternative they gave us was to shut it down with the loss of 5,500 jobs,” the official said. The decision was criticized by the main opposition party leftish SYRIZA as a “great robbery.” The Leftist party leader Alexis Tsipras said he would reverse the privatization if he came to power, adding it had only benefited “bankrupt private bankers”.
Pantalakis will also face questions from opposition lawmakers over 150 million euros ($186 million) in loans made by ATEbank to New Democracy and the PanHellenic Socialist Movement (PASOK,) Greece’s two former biggest mainstream parties. These loans were insufficiently collateralized and remained unserviced while he ran the bank, analysts noted and were not paid back, although Greek banks have been pressing customers whose pay has been cut and taxes raised to pay back 100 percent of what they owe or face legal action. New Democracy and PASOK, sharing power with the Democratic Left in a shaky coalition, have ruled Greece for nearly 40 years and owe banks $310 million they haven’t repaid, even though they receive hundreds of millions of dollars in taxpayer funding.
Source: Financial Times