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Moldova: Shadow Falls Over Greek Telecom Deal

Athens, 19 June 1998 (RFE/RL) -- The plans of the Greek state telecommunications system OTE to buy a share of the Moldovan telcommunications network have been touched by allegations of scandal.

The plans call for OTE, the Hellenic Telecommunications Organization, to take a 40 per cent stake in Moldtelecom, the Moldovan system which is being sold off.

The deal is important for Greece. Athens is anxious to use Moldova as a stepping stone to other emerging markets, notably Romania, where OTE is also eyeing a possible 35 percent stake in Romania's Romtelecom.

Last week (June 11) OTE's board of directors took the unusual step of issuing a statement saying "misleading reports" were being circulated, with the intention of damaging the company's growth prospects. It said that such rumors were being spread by those opposed to OTE's presence in Balkan markets.

The statement did not directly specify which reports it considered misleading. But it said that in negotiations for the purchase of the Moldtelecom stake, OTE is exclusively represented by the Credit Suisse-First Boston Bank (CSFB).

That contradicted a report appearing in the Greek newspaper Kathimerini, which had said that the OTE's negotiator with the Moldavan government was Costas Tsoukalidis. Tsoukalidis is general director of a company called Intrakom. He also happens to be Moldova's honorary consul in Greece.

Kathimerini said it had documents in its possession showing that Tsoukalidis has proposed a high price for the Moldtelecom stake -- some $68 million, as opposed to between $46 million and $53 million agreed-on by the OTE board earlier.

OTE director general Giorgos Chrysolouris allegedly accepted the higher bid, which was then conveyed to the Moldovan government.

Following this report, a letter purporting to be from Moldovan transport minister Ion Casian appeared in the Greek media. The letter, to the OTE, mentioned the mediation role of Tsoukalidis and also added that through this mediation, the price as initially agreed had increased substantially.

RFE/RL reports from Athens that Greek government spokespersons refused to comment on the matter.

Meanwhile Kathimerini published a letter from Tsoukalidis in which he said that he negotiated in the capacity of Moldova's consul, and that his position as the Intracom's managing director had nothing to do with the subject.