BDL Governor Riad Salameh during a press conference in Beirut in November 2019. (Credit: Joseph Eid/AFP)
As already unofficially announced on several occasions over the past few days, Mount Lebanon Public Prosecutor Judge Ghada Aoun stepped it up a notch against central bank chief Riad Salameh and people in his entourage yesterday.
These steps have suddenly accelerated in recent weeks, in a climate marked by a strong political polarization around Salameh and the banking sector. This polarization has increased all the more as Judge Aoun’s motivations and methods raise questions and doubts, particularly within circles opposing the Aounist movement, to which the judge is known to be close.
Legal proceedings for illicit enrichment against the central bank governor were therefore initiated yesterday by the judge, the latter confirmed to L'Orient-Le Jour. They are based on information about apartments he acquired in France, as well as offices BDL rented from a former partner of the governor, Anna Kosakova, located on the expensive Avenue Champs-Élysées in Paris.
A judicial source told L'Orient-Le Jour, however, that the file compiled by Judge Aoun in this case is based solely on information already known to the public, in other words on press reports.
Salameh, who was summoned again yesterday morning by Judge Aoun, did not appear for the hearing this time yet again. The judge explained to L'Orient-Le Jour that she initiated the proceedings in absentia, and that Salameh was notified of the process through a posting on the door of his home, as well as at the entrance to BDL’s headquarters.
Contacted by Reuters, Salameh, who has chaired the central bank for 30 years, recalled yesterday that an auditor’s report he had requested found that “no funds belonging to BDL went into this account.”
In November 2021, Salameh had, in fact, shed light on the results of BDO Semaan, Gholam & Co’s auditing his personal accounts, without publishing the firm’s report. Salameh had said in a statement that, according to the document, no public funds were used to pay fees and commissions to a company owned by his brother.
It is known that a Swiss investigation concluded that the company in question, Forry Associates LTD, registered in the British Virgin Islands in 2001, had a brokerage contract with BDL, thanks to which it had obtained $330 million in commissions on sales of BDL’s treasury bills and eurobonds between 2002 and 2015.
Salameh said that for the audit firm he hired, a “third party” had deposited the sums “in clearing accounts at the BDL.” The BDL governor had not provided details on the identity of said third party. Observers interpreted his remarks as an affirmation that the money was disbursed by the banks that had acquired the financial securities.
Judge Aoun also brought charges against Raja Salameh, the governor’s brother, who was arrested on Thursday on suspicion of being involved in real estate cases, along with Kosakova. Three firms are also being pursued in this vein, namely SCI ZEL, Eciffice and BET SA, for complicity in acts of illicit enrichment.
The files of Riad Salameh, his brother Raja, Anna Kosakova and the three targeted firms were transferred to Mount Lebanon Investigative Judge Nicolas Mansour. Raja Salameh, who has been in custody since Thursday, was to be freed the day before yesterday, as he cannot remain locked up for more than 24 hours, renewable once, excluding closure on weekends.
However, after Judge Aoun’s escalation, he is expected to remain behind bars. It will be up to the investigating judge to decide whether to release him or keep him detained.
In September 2010, BDL signed a contract with the service provider Eciffice, and renewed it several times, most recently in 2016, according to the revised contract that L'Orient-Le Jour viewed.
Anna Kosakova, with whom Riad Salameh had a child he recognized as his in 2007, heads the company. Information gathered by L'Orient-Le Jour indicates that the majority of the rent paid by BDL to Eciffice (more than €4.8 million) was transferred to the owner of the offices, which is SCI ZEL.
This real estate company was initially managed by the governor's brother, until he gave up his management seat as well as his shares (1 percent) to Kosakova in 2015. But the bulk of ZEL's funds derive from BET SA, an asset management firm established in 2007 in Luxembourg and managed since May 2021 by Kosakova.
BDL's central council targeted by a complaint
Earlier yesterday, Judge Aoun ordered the seizure of Raja Salameh’s real estate, as part of the same case. According to a court document that L'Orient-Le Jour was able to review, the judge forbade Raja Salameh from dealing with all his real estate.
According to a collective of lawyers who declare themselves independent and call themselves “Pioneers for Justice,” Aoun allegedly took this decision “after a dilapidation of public funds was proved as part of the preliminary investigation she conducted following a complaint” filed by said collective.
The latter, as well as the United for Lebanon collective (whose links to the Free Patriotic Movement are pointed to by several sources) also filed a complaint yesterday against current and former members of BDL’s central council, as well as against the current and former government commissioners of the central bank (directors of the Economy and Finance).
The two collectives accuse them in particular of “breaching the obligations of their duties, gross negligence in the management of a public service and squandering of public funds.”
Contacted by L'Orient-Le Jour, Haitham Ezzo, founder of Pioneers for Justice, said that the process was carried out “in order to avoid arbitrary justice,” alluding to the fact that it is not only Riad Salameh who is implicated in the case, but also the other BDL officials. The latter are appointed by the executive branch based on a political and confessional quota.
Less than 24 hours after the arrest of Raja Salameh, Prime Minister Najib Mikati, who regularly defends BDL’s chef, and the banking sector, stepped it up a notch and accused “some judges” of causing tensions in the country.
Raja Salameh’s lawyer, Marwan Issa el-Khoury, said on Friday that the accusations of fraud and illicit enrichment brought against his client were completely unfounded and are based on “media speculation, not on any evidence.”
In addition to Lebanon, Riad Salameh is being probed in Switzerland,France, Luxembourg and Liechtenstein on suspicion of “embezzlement” and “money laundering” among other misdeeds. Also, Judge Aoun issued a travel ban against the BDL governor.
Critics of Judge Aoun, President Michel Aoun and the FPM, believe that this camp wishes to improve its reputation before the May 15 legislative elections by riding the wave of the cause of depositors who are afraid of losing their money for good. Others have even speculated that the judge’s actions could lead to further escalation, in view of postponing the vote, given the FPM’s diminishing popularity.
This article was originally published in French in L'Orient-Le Jour.
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