Greece's privatisation of OPAP faces investigation

An Athens prosecutor is investigating Greece's biggest privatisation deal to date: the sale of OPAP, the state gambling monopoly and the country's biggest sports sponsor, to a group of Czech, Russian, Slovak and Greek investors.

The probe was launched weeks after Emma Delta, a Cyprus-registered bidding vehicle, paid €650m in August for the state's 33 per cent stake in OPAP and replaced the chief executive and other board members with its own appointees. Emma Delta submitted the only valid binding offer.

The investigation was confirmed to the Financial Times by people co-operating with Ioannis Sevis, the prosecutor.

It will cast a spotlight on Greece's privatisation programme as it tries to meet ambitious revenue targets set by the EU and the International Monetary Fund under the terms of the country's second €172bn bailout.

The OPAP sale enabled Taiped, the privatisation agency, to meet last year's pared-back revenue target of €1.3bn after several big deals were delayed or fell through.

The probe is focused on transparency, governance and possible conflict of interest in the deal, according to a person with knowledge of the prosecutor's investigation.

An unusual piece of legislation approved by the Greek parliament last April - shortly before Emma Delta and Third Point, the US hedge fund, were named as shortlisted bidders for OPAP - has raised questions about the country's commitment to transparent procedures in line with EU gaming industry standards.

A clause inserted into an existing investment law froze until last month the Greek gaming regulator's obligation to carry out a "probity" check on potential buyers of OPAP, to ensure they were not involved in any criminal activities or money-laundering.

Evgenios Giannakopoulos, executive president of the Hellenic Gaming Commission, defended the amendment, saying the regulator lacked capacity at the time to monitor would-be investors. "We relied on the privatisation agency to carry out the checks. There wasn't any point in duplicating the procedure," he told the FT.

The leading investors in OPAP are Jiri Smecj, a Czech billionaire, and Dimitris Melissanidis, a Greek oil tycoon. Mr Smecj controls Emma Capital, an investment company which set up Emma Delta as a vehicle to bid for OPAP. He holds a 22.5 per cent stake in Emma Delta but controls 66.7 per cent of voting rights in Emma Delta through a separate management company. Mr Melissanidis controls a stake in Emma Delta held through a Cyprus-based company, according to one person familiar with the matter.

Mr Melissanidis presented himself to Greek media and the Athens business community as Emma Delta's representative in the capital during OPAP's privatisation process. Mr Melissanidis, a self-made billionaire, is the largest shareholder in Aegean Marine Petroleum, a global supplier of marine fuel listed on the New York Stock Exchange.

A listing prospectus for Aegean Marine published in 2006 stated that Mr Melissanidis, its founder, had been subject to proceedings, including criminal cases, in the past. However, he was acquitted of the allegations except for two matters in the 1980s, for which he was fined.

The other participants in Emma Delta are the Czech-based KKCG investment group, Russia's ICT banking group, J&T Finance of Slovakia and Christos Kopelouzos, the son of a Gazprom representative in Greece.

Mr Melissanidis - not Mr Smecj - attended the official contract signing ceremony in August at the Greek finance ministry. In the absence of Emma Delta's foreign shareholders, Spyros Fokas, Aegean Marine's chief lawyer, signed the contract on behalf of the bidding group. Mr Fokas was later appointed OPAP's first deputy chairman by its new shareholders. Mr Melissanidis's son Georgios is a non-executive director of OPAP.

An official in the prosecutor's office said the investigation was progressing. He declined to comment further.

Mr Melissanidis and Mr Fokas declined to provide a comment for publication.

The OPAP sale was completed around the time Mr Melissanidis reappeared in Greek football, saying he was committed to reviving the fortunes of AEK, an Athens club that won three championships in 1992-94 under his ownership. AEK lost ground after it changed owners and is now languishing in the third division. Mr Melissanidis, known as "the Tiger" in Greek sports media, is a leading member of a committee overseeing the club's management and preparing a fundraising campaign to build a €20m stadium for AEK.

Mr Melissanidis was criticised by Evangelos Marinakis, a leading shipowner and chairman of Olympiakos, Greece's most successful football club, after AEK was awarded €1.9m of sponsorship by OPAP last September. The decision was unprecedented as individual clubs in the third division have not previously been considered eligible for OPAP funding.

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