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Victoria Mindova

The Ministry of Finance imposed garnishment of 50 per cent of the cash assets in the account of Aspis Pronia insurance company. The company closed in 2009 after the president and CEO of the insurance company, Pavlos Psomiadis, tried to falsify a bank guarantee of 500 million Euros issued by HSBC bank, in order to cover the shortages of the company from the supervisors. He was charged with attempted fraud and legalization of income from criminal acts. The case file showed that the company with a share capital of 60,000 Euros in 2003-2006 had issued bonds worth eight million Euros, which were then sold to investors for 55 million Euros.

The number of people “burnt" by Psomiadis’ gang, who had invested their life savings in the phantom-comnpany, is around 250,000. If we take into account also their families, who relied on the return of investment, the number of victims exceeds one million. GRReporter sought to find information from the Union about the people affected by the collapse of Aspis regarding the consequences for those insured after the decision of the Ministry of Finance to redirect half of all available funds of the company towards the state budget.

"The reason for imposing garnishment on the cash assets is a result of the accumulated liabilities of Pavlos Psomiadis before the company declared bankruptcy in 2009," said union President Teoharis Petridis. He said that the total cash in the account of the company does not exceed one million Euros. In addition, it has Greek government bonds worth 100,000 Euros, which are included in the PSI (Private Sector Involvement) for reduction of the external debt and their nominal value will be cut by 53.3 percent. This means that the imposition of garnishment on the liquid funding, including on the investments in government bonds, does not affect an amount greater than 500,000 Euros.

"As you can understand Psomiadis is being prosecuted for embezzling 30 million Euros, so the imposed garnishment on half a million Euros does not solve Aspis’ problems," said the chairman of the union of victims. According to an estimate from October 2011 the company has significant investments in property, which reach about 90-100 million Euros. This is also the main trump for those insured in order to find a foster insurance company, which will incorporate Aspis’ health contracts in its portfolio. With the thinning cash account, which hereinafter will be divided in half with the state, the future of those insured with Aspis remains even less clear.

The main concern of those insured with the bankrupt company is that the company's liquid funds are depleted and the liquidators, who are working on the transfer of the health contracts to the portfolio of the foster company, will not be paid. "One way to secure the activity of the liquidator firm preparing the plan for transferring the insurance, is to begin selling the properties of Aspis. The problem is that 50 percent of all funds from these future deals will go to the state," says Petridis. Furthermore, if they undertake a massive sale of real estate, they can gain cash, but the insured will lose the property guarantees behind their contracts. Thus, no insurance company will bother to take the portfolio of Aspis without a property rescue parachute.

It is expected that in mid-March the Bank of Greece will tender for the receiver of the assets of Aspis. This is the only solution, which is possible after the announcement by the Ministry of Finance to withhold 50 percent of all funds in the bank account of the company. When the new owner of Aspis’ portfolio takes hold of it, the decision of the economic prosecutors will automatically be dropped.

So far the decision of the Ministry of Finance makes the state the first recipient of any monies from the sale of company assets. "Before the imposition of garnishment by the state half of all liquid assets first had to go to repaying the costs of the company liquidator. Then came the obligations of Aspis' employees, followed finally by the payment of outstanding debts to the state. With this change, from last place in the list the state came first in the scheme of who will obtain money and when by the reforming of Aspis," concluded Teoharis Petridis.

Overall, the general instability of the Greek economy over the past two years is not conducive to the rapid solution for policyholders in Aspis. The reason why the imposition of garnishment came right now remains unknown, bearing in mind that the obligations of the company are so great that the amount kept by the state is almost symbolic. Sources from insurance circles say that Aspis is the only company that has uncovered liabilities to the state. However, it is the only company with imposed garnishment on its account.