When the main office of Lebanon's Intra Bank
reopened last month to pay off holders of small savings accounts, hopes
rose that the country's biggest bank might soon be out of the crisis
that had shuttered it and slowed much of the country's business since
October. Last week Intra received a new setback, this time from the
courts. Hoping to stave off liquidation and gain time to arrange new financing,
Intra had asked Lebanon's Commercial Court for a three-year grace
period in which to repay all of its depositors. Going over Intra's
books, the judges found a host of “irregularities.” Among them: about
75% of its $156 million in outstanding loans had been made to Intra
insiders on “virtually nonexistent” collateral. The court declared
Intra bankrupt and took control of the property of its directors,
including that of ex-Chief Yusif Bedas, who is now in Brazil. Pending a
decision on an appeal, Intra now looks to the legislature for a
reprieve. A new law that is about to be introduced would, if passed,
override the court decision, give the bank six months to refloat itself
under new management—or be scuttled forever.
