Tuesday, 31st May 2016
31st May 2016

Hellenic Shipyards embroiled in bribery, money laundering scandal

David Glass
By from Athens


The Greek judiciary's investigation into the country's massive bribe scandal has netted another shipping personality and German industrial group. Sotiris Emmanouil, the former managing director of Hellenic Shipyards, Greece's largest shipyard, was arrested 13 January in connection with taking bribes of some EUR23m to secure submarine deals with Germany's HDW Ferrostaal.

Authorities arrested Emmanouil in his luxury home, which was subsequently seized.

Also arrested was an associate of ex-Defense minister Akis Tsochatzopoulos, Yiannis Beltsios, as the judiciary stepped up its corruption probe in connection with taking bribes to secure arms deals. Tsochatzopoulos, was jailed in October for money laundering.

The probe into allegations of huge bribes being paid to Greek officials by German companies to secure an order for four submarines from the Greek navy, has been going on for over two years. Two former managers of Ferrostaal AG have also been charged in Munich with paying bribes of more than Euro 62m ($90m) to secure submarine orders in Greece and Portugal from 2000 through to 2007.

Allegations being levelled against Emmanouil are that the bribes were paid by Ferrostaal, which brokered deals for German shipbuilder HDW in 2000 and 2002. The contract is said to have been worth upwards of Euro 1.8bn. One of the Class 214-type submarines was built in HDW's Kiel yard in Germany, and the other three in Greece's Hellenic Shipyards.

Hellenic Shipyards was founded by shipping icon Stavros Niarchos in 1956 and in the following 30 years became one of the Med’s prime shipbuilding and shiprepair facilities with a 500,000dwt capacity drydock, before being wracked by industrial strife and subsequently taken into the Greek public sector in 1985 against a payment of $14m to the Niarchos group, which had closed the yard’s gates.

In May 2002, after long drawn-out negotiations, the Athens government signed an agreement which transferred 51% control of the Skaramanga-based shipyards to the German consortium comprising HDW / Ferrostaal. In 2004 Thyssenkrupp Group acquired HDW and its slice of Hellenic and more recently it has passed to Privinvest Shipbuilding, an affiliated company of Abu Dhabi Mar.

Warrants for the arrest of Emmanouil and Beltsios were issued after former Defense ministry official Apostolos Kantas alleged during testimony they had received under-the-table payments. Both men remain in custody.

Leading shipowner and businessman Victor Restis, spent almost five months under detention battling charges of embezzlement and money laundering. The 45-year-old Restis, under investigation for loans issued by First Business Bank when he was executive chairman, was granted conditional release from pretrial custody by an Athens prosecutor 3 December . He has vowed to prove his innocence.

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