|Central Bank denies thawing frozen accounts (Daily Star)
|The Central Bank has yet to unfreeze the bank accounts of 12 prominent businessmen suspected of money laundering, a source said Monday, contradicting a newspaper report.
"The bank accounts of these suspects will remain frozen until investigations are complete," a banking source told The Daily Star.
The As-Safir daily said Monday that the Central Bank's investigation committee ended the freeze, but commercial banks said that they hadn't received Central Bank authorization to unlock the accounts. Most of the 12 suspects were involved with the troubled Al-Madina Bank, which is trying to raise enough money to stay in business. The suspects allegedly issued bad checks valued at more than $300 million two months ago.
The Central Bank quickly confiscated these checks and ordered the chairman of Al-Madina bank, Adnan Abu Ayash, to cover the losses immediately. Abu Ayash, a wealthy businessman with strong connections with Saudi Arabia, managed to raise $300 million last month.
However, the bankers said that the losses of Al-Madina were over $450 million and that Abu Ayash had pledged to raise another $150 million in the coming days. The Central Bank has assured that the rights of the depositors will be fully restored.
The bank's new management will consider selling its assets and loan portfolio to cover the losses. Sources said that the previous management did not act in a professional manner and broke a number of laws, adding that the bank gave loans without any guarantees and didn't monitor the movement of deposits.
Al-Madina, according to sources, also offered unrealistic interest rates on dollar deposits to attract customers."The bank hardly had any Treasury bills in its portfolio, which raises the question as to how it managed to offer these high interest rates to customers," a banker said. The bank is also under pressure to explain the circumstances surrounding bad checks issued by several leading businessmen.
Among the 12 suspects who issued the checks are Taha Qulilat and Ahmed Ali Ahmed, who own a number of hotels and malls in Beirut. But the Central Bank didn't specify what type of money laundering schemes the suspects were involved in. Sources said that these businesses are still trading despite the frozen accounts.
The Daily Star