(MENAFN- The Peninsula)
Beirut: A Lebanese judge has ordered a protective freeze of some properties and company stakes of 14 individuals with links to some of Lebanon's biggest banks, a move the lenders said could further isolate them from international financial networks.
The asset freezes, listed in a judicial document seen by Reuters, are part of a legal complaint lodged by lawyers belonging to a civil society group on behalf of Lebanese depositors.
Lebanon's banks were once among the world's more profitable lenders, funnelling funds from a scattered diaspora into state coffers in return for high interest rates. But as Lebanon's economic meltdown gathered pace and dollar remittances dried up, the financial system was starved of funding.
The complaint accuses local banks, which have frozen customers out of their deposits and blocked them from transferring cash abroad since the crisis erupted in late 2019, of crimes including negligence and fraud.
Lenders have denied any wrongdoing and have repeatedly said that customers' deposits are safe.
"The Lebanese banks, the majority of them, have taken over the deposits of their customers and then against the law lent these deposits to the government and to the central bank, which spent it on their international commitments and on salaries," Hasan Bazy, one of the lawyers who brought the case forward, told Reuters, adding that more complaints would be forthcoming.
"These banks and their managers have assets in companies and have real estate and we wanted these to be blocked so that they can be used as a guarantee for the money of depositors in case it can't be retrieved."
A judicial source confirmed the judge's decision, which can still be appealed by the individuals in question after they have been legally informed of the decision.
In response to the judge's order, the Association of Lebanese Banks said it respected judicial authority but that such decisions could push more foreign correspondent banks to curtail their business relations with Lebanon's financial system.
"The constant attack on banks and bankers is not the ideal way to get deposits back, which we assure are safe," the association said in a statement.
Lebanon's central bank governor Riad Salameh warned last month about the loss of correspondent banking relations in a letter to the public prosecutor.
But Bazy said more legal complaints would soon follow: "This is the first in a series of cases we plan to file, ultimately targeting around 70 banks."
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