| 20 May 2024, Monday |

Lebanese banks plan strike in response to judicial orders

Lebanese banks are planning a two-day strike next week in protest of judicial actions targeting seven major lenders, a confrontation that might exacerbate the country’s crisis, which has been ongoing since 2019.

The banking group said the walkout was a protest against “the arbitrariness of several judicial judgments,” referring to orders that have frozen the assets of seven banks and barred six of their executives from traveling since March 14.

Prime Minister Najib Mikati claimed that some judges’ acts were inflaming emotions, and that he had instructed the public prosecutor to “take appropriate steps.”

Since the financial system collapsed in 2019 under the weight of massive public debts produced by decades of governmental corruption and waste, Lebanon’s banks have been immobilized, locking depositors out of their savings. It is Lebanon’s most destabilizing crisis since the civil war that lasted from 1975 to 1990.

“We are in the midst of a very, very hazardous moment in the Lebanese crisis,” Nabil Boumonsef, deputy editor of Annahar daily, said, adding that a prolonged bank closure would risk societal unrest since paychecks would be unable to be withdrawn.

Six banks’ assets have been frozen by Judge Ghada Aoun while she investigates transactions between them and the central bank.

The assets of the seventh, Fransabank, were frozen by a judge who found in favor of a man who had launched a complaint demanding the bank reopen his account and pay out his deposit in cash.

As a result of the injunction, Fransabank warned on Thursday that it would be unable to disburse funds, including government employee pay, because its vaults had been shut.

Due to Lebanon’s failure to implement a capital control law since the crisis began, banks have used informal controls to treat depositors unequally. Banks claim they have been advocating for such legislation for some time.

Ghada Aoun also ordered the arrest of Raja Salameh, the brother of central bank governor Riad Salameh, on a charge of “complicity in unlawful enrichment” in a case involving the governor, according to a judicial source.

On Friday, a lawyer for Raja Salameh declined to comment on the case, while the office of Riad Salameh’s lawyer said he was not available for comment.

Protecting the perpetrators’

In his statement, Mikati, a supporter of Riad Salameh, did not specify which judicial actions he was criticizing.

But he said “the course of action taken by some judges was “pushing toward ominous tensions, and there are attempts to use this tension in election campaigns,” referring to a May 15 parliamentary election. “This is a dangerous matter.”

Critics of Judge Aoun accuse her of working according to the political agenda of President Michel Aoun, who appointed her as public prosecutor for Mount Lebanon. She denies this, saying that she is implementing the law.

In a tweet, Judge Aoun said it was regrettable to hear “unacceptable attacks on the judiciary when some are not pleased by this or that prosecution,” adding: “God forbid that the goal is to protect the perpetrators.”

Aoun and his political movement, the Free Patriotic Movement (FPM), are at odds with Mikati and several other major Lebanese parties over Salameh, whose three-decade tenure as governor has faced increased scrutiny since the economy collapsed.

The FPM has called for Salameh’s removal, while Mikati has shown support for the central bank chief even as he has faced embezzlement probes at home and abroad.

Salameh faces investigations in Lebanon and at least five European countries including Switzerland over allegations of money laundering and embezzlement of hundreds of millions of dollars at the central bank – investigations in which his younger brother Raja is also implicated.

Salameh has denied any wrongdoing. He has described the accusations against him as politically motivated.

  • Reuters