Lebanon’s Central Bank governor, Karim Souaid, said he has taken domestic and international legal action to recover misused or embezzled public funds, with the aim of restoring liquidity and repaying bank depositors affected by the 2019 financial collapse. File Photo by Wael Hamzeh
Lebanon’s Central Bank governor, Karim Souaid, said Thursday the bank is pursuing domestic and international legal action to recover misused or embezzled public funds, with the aim of restoring liquidity and repaying bank depositors affected by the 2019 financial collapse.
Souaid said during a news conference in Beirut that the Central Bank has filed a criminal complaint against a former bank official, whom he did not name, and a former banking professional for misappropriating the bank’s funds through four shell companies established in the Cayman Islands.
He said the actions led to the illicit enrichment of the two defendants and others who will be identified as the investigation continues.
“This involved exploiting the Central Bank’s resources for personal gain,” he added, citing suspected money laundering involving bribes integrated into broader financial transactions.
He said the case involves Forry Associates, controlled by Raja Salameh, brother of former Central Bank Governor Riad Salameh, who stepped down in 2023 and was jailed a year later on corruption charges, accused of embezzling more than $300 million between 2002 and 2015.
Salameh, who was held for 13 months, was released last September on a record $14 million bail and placed under a travel ban.
The Salameh brothers, who have rejected the accusations, are under investigation in several European countries in connection with the embezzlement case.
Souaid said he will meet with the investigating judge in France before month’s end “to share sensitive information” with the French authorities, aiming to expose further illegal coordination between companies, bankers and former Central Bank officials “who conspired to seize the bank’s and depositors’ funds.”
He added that the bank has launched legal proceedings in France, Luxembourg and Liechtenstein, joining ongoing cases, and is monitoring investigations in Switzerland and Germany, coordinating closely on the Swiss case.
“The efforts target a complex network of assets, companies and legal structures set up to illegally seize the bank’s funds, benefiting former officials, their families and a wider circle of accomplices, including bankers, financial advisors and lawyers,” Souaid explained.
The bank, he added, is working with specialized international investigators and law firms, and the probe will continue until the funds are fully recovered.
According to the governor, preparations also are underway for additional legal action in Lebanon against specific companies that allegedly exploited a “Consulting Account” at the Central Bank, through which “large sums unrelated to the bank’s operations or depositors’ funds were misused.”
He said that the bank is seeking to recover funds from individuals who abused their positions at the Central Bank, private banks or consultancy firms, and violated laws and regulations for the sole purpose of illicit enrichment.
However, Souaid did not specify the total number of people involved or the full amount believed to have been embezzled.
Through this legal campaign, Souaid said the Central Bank aims to recover funds and use them solely to repay depositors, who number about 2 million, with an estimated $110 billion in deposits lost due to state mismanagement.
According to a policy paper published by Lebanese economic expert Toufic Gaspard in 2022, total bank deposits were the equivalent of $169 billion just a month before the October 2019 financial crisis.
