Riad Salameh, the erstwhile governor of Lebanon’s central bank, has been apprehended in Beirut over allegations of pilfering approximately $40 million from the institution. Authorities have detained Mr. Salameh, fearing he may attempt to abscond from the country.
He might go down in Lebanon’s history as the initial high-ranking official to face imprisonment for financial transgressions, if he becomes the subject of a trial and subsequent conviction. After playing a significant role in Lebanon’s economic rehabilitation following a 15-year civil conflict that culminated in 1990, Lebanese people had at one point, applauded him as a financial marvel. Salameh terminated his thirty-year tenure as the head of the central bank, the Banque du Liban, in the wake of accusations levied against him last year.
Mr. Salameh, aged 73, is confronted with an array of accusations including embezzlement, fraud, money laundering and tax evasion both locally and overseas. These charges were initiated following an investigation that was commissioned in July 2023.
Salameh has also been targeted by various Lebanese people for the financial debacle which started in October 2019. The debacle triggered a 90% devaluation in Lebanese currency, a sudden rise in inflation and banks having to tightly manage withdrawals by depositors. It reached a point where exasperated clients commonly resorted to bank thefts to withdraw their money or empty out their accounts. Lebanon’s economic predicament has been classified by the World Bank as one of the most acute in the past 150 years.
Reports claim, Salameh clandestinely procured $111 million in illegal commissions between 2015 and 2018 from the bank’s transactions with Optimum, a Lebanese brokerage enterprise. Allegedly, the latter has been the subject of an investigation since last year for purportedly tampering its financial statements and hiding Lebanon’s financial deficits.
Before bidding the bank farewell, Salameh was interrogated and his Lebanese funds have been frozen.
Following public prosecutor Jamal al-Hajjar’s decision to accuse Salameh officially, the investigation will be handed over to an examining magistrate.
Additionally, half a dozen European nations have accused Salameh of draining hundreds of millions of dollars via the firm Forry Associates, owned by his sibling, Raja Salameh.
In 2022, French, German and Luxembourger authorities confiscated assets worth $135 million, inclusive of high-end properties, as a consequence of probes into the alleged fraudulent activities of Mr Salameh and four others. They stand accused of misappropriating $335 million over a period spanning 2002 to 2021.
The following year, Interpol served a red notice based on warrants for Mr Salameh’s arrest issued in France and Germany. However, it is worth noting that Lebanon does not extradite its nationals. Economic sanctions against him have also been imposed by the United States, the UK and Canada.
Meanwhile, Lebanon’s economy is in freefall, with the country’s squabbling political parties unable to break the political deadlock and address the dire situation. The retirement of the previous president, Michel Aoun, in October 2022, has left a leadership vacuum, with parliament failing in ten consecutive attempts to elect his successor. Consequently, the interim government is hamstrung, unable to implement crucial reforms that would make Lebanon eligible for substantial financial aid aimed at salvaging its economy.