Creating new perspectives since 2009

Lebanon’s state prosecutor blocks decision to freeze bank assets

March 6, 2020 at 12:19 pm

A protest against increasingly difficult living conditions in Beirut, Lebanon on 29 September 2019 [Hussam Chbaro/Anadolu Agency]

Lebanon’s state prosecutor Ghassan Oueidat suspended the order to freeze the assets of 21 Lebanese banks, their CEOs and board members, late yesterday.

Oueidat warned that a move to freeze assets could cause chaos within the financial sector and plunge the country into more uncertainty.

Adding that the order was postponed to allow for the “study of its impact on the national currency, banking transactions as well as on the money of savers and economic security”, according to a statement received by the National News Agency (NNA)

Earlier yesterday, the country’s Financial Attorney General Ali Ibrahim issucourted an order to freeze the assets of some of Lebanon’s biggest lenders, including Bank Audi, Fransabank, BLOMBank and the Lebanese unit of Société General.

The Daily Star reported that a delegation from the Association of Banks in Lebanon (ABL) contacted President Michel Aoun and Oueidat requesting that the decision be revoked.

Oueidat later held a meeting with the ABL, and a private meeting with Ibrahim, to discuss the order.

READ: US contractor charged with leaking classified information to Lebanon’s Hezbollah

The decision was made after Ibrahim questioned several bank chairmen, including the head of the ABL, Salim Sfeir, over allegations that Lebanese banks have committed serious violations in money and credit law.

Leading bank officials allegedly transferred more than $2 billion from the country, despite informal bank restrictions, at the start of protests in October and November 2019.

Ibrahim said: “We have investigated the 21 banks for several days and discovered that the lenders did not treat the customers properly and did not even allow them to withdraw their savings. The arguments of the banks was not convincing and for this reason seven judges who studies these files extensively decided to take this decision.”

Ibrahim had also prohibited chairmen of the banks, board of directors and general managers from touching the frozen assets.

Several politicians slammed the move, with former Prime Minister Saad Hariri calling it “an uncalculated, populist political message that does not preserve the rights of small and big depositors nor the confidence of friends and brothers in Lebanon.”

Rumours that Speaker of the House Nabih Berri was behind the decision were refuted as “totally baseless”.

Lebanon is facing its worst economic crisis since the end of the civil war, and has yet to decide on the repayment of, or default on, Eurobonds maturing on 9 March.