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France opens an investigation into the corruption of the head of the central bank of Lebanon | News from banks

By on June 7, 2021 0

French prosecutors have opened a preliminary investigation into money laundering allegations against longtime Lebanese central bank chief Riad Salameh, who is also accused of being associated with an organized criminal group.

French prosecutors have opened a preliminary investigation into money laundering allegations against the governor of Lebanon’s central bank, the prosecutor’s office said on Monday.

The move comes in the wake of Switzerland’s launch of an investigation into possible money laundering and embezzlement at Lebanon’s central bank, which is now at the heart of Lebanon’s deep financial crisis.

The French prosecution said the investigation around Riad Salameh was opened at the end of May, involving potential charges of money laundering and association with an organized criminal group.

Salameh, 70, has headed Lebanon’s central bank since 1993 and for many years was regarded as the symbol of the country’s monetary stability.

In a statement sent to Reuters news agency on Sunday by the bank’s governor, Salameh’s French lawyer Pierre-Olivier Sur dismissed the allegations as a politically motivated “communications operation”.

In 2019, Lebanon plunged into its worst economic and financial crisis in living memory. Since then, the country’s currency, the Lebanese pound, has lost around 90 percent of its value on the black market, decimating the purchasing power of ordinary Lebanese.

Over 40 percent of Lebanese households reported difficulty paying for food and other essentials.

Salameh reassured depositors last Thursday that the central bank – called Banque du Liban – was not bankrupt and that people’s deposits were safe and would soon be returned, after overturning the decision to stop withdrawals from bank accounts. dollar deposit that sparked street protests.

Anti-government protesters in Lebanon are now calling Salameh – a former Merrill Lynch investment banker – a “thief.”

Protests have repeatedly taken place outside his office in Beirut as the economic crisis deepens. According to the World Bank, the country’s gross domestic product (GDP) fell from nearly $ 55 billion in 2019 to around $ 33 billion last year, with GDP per capita plummeting by around 40%.

In January, Switzerland’s attorney general said he had asked Lebanon to cooperate with the central bank’s investigation.

Lebanese media have reported in recent months that Salameh, his brother and other collaborators have been implicated in illegal businesses. The allegations include transfers of money abroad despite the capital controls imposed in the country.

Salameh denied making any such transfers.

French anti-corruption group Sherpa filed a lawsuit against Salameh in April, citing investments including millions of euros in real estate.

Responding last month, Salameh said he demonstrated that his wealth was acquired before he took up banking duties nearly 30 years ago.

Lebanon opened its own investigation in April following a legal request from Switzerland alleging that more than $ 300 million had been embezzled from the central bank through a company owned by Salameh’s brother.

The Lebanese financial and political elite are facing increasing pressure over allegations of mismanagement, corruption and obstruction of efforts to unlock international aid.