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bankingJanuary 31, 2021

Lebanon: Central Bank governor charged with dereliction of duty

The governor of Lebanon's Central Bank was charged yesterday with dereliction of duty and breach of trust, the state-run National News Agency (NNA) has reported. According to Bloomberg, Riad Salameh has been indicted over his alleged misuse of millions of dollars last year. Mount Lebanon state prosecutor Judge Ghada Aoun has referred the case to an investigative judge.

Salameh is alleged to have allowed dollars provided by the Central Bank on an electronic trading platform to be used to help people pay for essential needs and expenses to be sold instead on the black market at a higher price. Nearly 40 financial institutions, including foreign exchange houses, are said to have profited from the illicit transactions, leading to the loss of between $5 and $7 million between last June and December.

The 70-year-old governor has headed the Central Bank since 1993, and is also facing an investigation by Swiss officials over allegations of 'possible embezzlement' and 'aggravated money laundering'. The investigation will centre on $400 million worth of overseas transfers purportedly made by the governor and his close associates. The Swiss authorities have not yet confirmed if he is the subject of investigation specifically.

Nevertheless, he has denied all allegations. On Monday, he added that news and figures circulating on social media about the alleged overseas transfers from the central bank were exaggerated. 'They aim to systematically tarnish the image of the Central Bank and its governor,' he claimed.

Salameh was previously accused of financial misdemeanours in a report by the Organised Crime and Corruption Reporting Project (OCCRP) and its Lebanese partner Daraj, in August last year. The report claimed that he and his family own $100 million os assets worldwide, including real estate in Germany, Belgium, and Britain, and have used several overseas shell companies to amass wealth illegitimately.