Friday, October 23, 2020

Lebanon freezes assets of 20 banks and board members

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Lebanon’s financial prosecutor has frozen the assets of 20 Lebanese banks, their top bosses and board members, state media and judicial sources said on Thursday.

Judge Ali Ibrahim gave notice to the central bank and the banking association, state news agency NNA said without naming the banks or giving details of the assets.

The move to freeze assets is part of an ongoing investigation, a senior judicial source said without elaborating.

The source said the decision involved some of Lebanon’s biggest banks, including Blom Bank, Bank Audi , Byblos Bank, Bank of Beirut and SGBL (Societe Generale De Banque Au Liban SAL).

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The Association of Banks in Lebanon (ABL), which represents the nation’s lenders, could not be reached for immediate comment.

Local banks are at the heart of a financial crisis crippling the country as the clock runs down on its looming debt maturities, including a $1.2 billion Eurobond due on March 9.
The government will meet on Saturday to take a decision, after Parliament Speaker Nabih Berri said a majority of MPs oppose paying even if that leads to default, compounding doubts over whether Lebanon will meet the March repayment.

The economic and financial strains came to a head last year as capital inflows slowed and protests erupted against a political elite that has dominated Lebanon since the 1975-1990 civil war and steered it into crisis.

The crisis is rooted in decades of waste and corruption which landed the country with one of the world’s biggest public debt burdens. Domestic banks, which for years funneled deposits to the state, hold the bulk of the sovereign debt.

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Lebanon is probing the sale of Eurobonds by local banks to foreign investors though the practice is not illegal, a judicial source said last month.

Berri, one of the country’s most influential leaders, blamed local banks on Wednesday for diluting the local holding. Critics say this has weakened Lebanon’s position in talks with foreign bondholders.

Some politicians have criticized the banking sector recently as public anger turned to the banks, which have severely curbed people’s access to their savings and blocked transfers abroad.

The head of the banking association, Salim Sfeir, has said those measures aim to keep Lebanon’s wealth in the country.

Sfeir said on Wednesday that the sector was being targetted with rumors and that banks had suffered losses to secure liquidity.

The central bank has asked banks to review transfers of funds abroad by politicians and government employees between October and December.

The government separately approved a draft law on Thursday aimed at lifting banking secrecy. The information minister said the law, which will go to parliament, would apply to ministers, MPs and a range of public officials.

Original article on arabnews.com

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