In 1990, Greece were shocked by the Koskotas scandal. Giorgos Koskotas was at that time, Olympiacos chairman. As a result, the Reds was involved in the financial and judicial progress that had to do with the full of sins Bank of Crete. Greek governments helped Olympiacos with permanent and temporary solutions. The whole case started in the beginning of the 90s before Koskotas case reach the court.
The Greek State bail on the Clubs
The Minister of Finance I. Paleokrasas, shorty after the Koskotas scandal in 1990, adopted No. 2077684/18014/0025/1990 ministerial decision concerning four clubs: Olympiacos, Panionios, Kastoria and Veria who owed a debt to the Bank of Crete. According to the decision, Greek State provided the four clubs guarantees of 2.940.000.000 billions of which 2.600.000.000 were given to Olympiacos FC. If the clubs didn't not return the money to th Bank of Crete, the Greek State would pay the debt.
In the same decree, the provision that "The Greek government did not bail in favour of the clubs for their debts to the Bank of Crete in general but for debts that came from Bank of Crete lawsuits exercised after the ministerial decision" existed. The Greek State would sign a contract with Olympiacos FC, Panionios, Kastoria and Veria, with which the clubs would a) assign the 20% of their mixed income in the State favour in order to secure the money for the bail and b) would assign the 60% of their mixed income after the decision if favour of the Bank of Crete by depositing the relevant amounts after 10 days at the Deposits and Loans Fund.
It is not yet known if any of the clubs assigned the amount in favour of the Greek State or if a contract was even signed between the clubs and the Greek State.
Greek State versus Greek State
After the ministerial decision of 1990, in 1993 an article in the law mentioned that "The debts of the clubs would be deposited by the Greek State up to the amount guaranteed according to the decision made by Minister of Finance 2077684/18014/0025/1990 without recourse against the club.
In essence, the Greek government adopted a provision which abolished the previous Ministerial Decree, which provided not only the money to be received but the way it would be received. The article prohibited itself the opportunity to collect from the clubs the bail money which had to pay on their behaf tot he Bank of Crete.
In 1989, the Bank of Crete sued Olympiacos in front of the Piraeus First Instance demanding 608.000.000 drachmas and 8.125.000 DEM and 1.050.000 CHF. The lawsuit was accepted and explains the issue of the ministerial decree of 1990 that mentioned "The Greek State did not guarantee the clubs' debts to the Bank of Crete in general but only for debts that would come from Bank of Crete sues already exercised".
The second lawsuit came in 1992, July 8. According to the lawsuit "Olympiacos FC are obliged to deposit US $ 2,973,017. US 3,221,391 German Marks, 150,000 Dutch guilders and 2,210 Swiss Francs. Money that Koskotas had embezzled from the Bank of Crete and was used for Olympiacos transfer reinforcements. The club sued the Greek State demanding them to deposit the amount obliged to pay to the Bank of Crete 2.600.000.000 billions drachmas for which the Greek State had bailed. For the second lawsuit, a final decision by the Piraeus First Instance was made , accepting Bank of Crete lawsuit. According to the decision, Olympiacos were obliged to pay the compensation to the Bank of Crete.
What's going on today
The case did not stop there. The litigations between Olympiacos-Greek State and Bank of Crete continued and after 25 years, the situation is: The Supreme Court decided that Olympiacos owe 608.000 .000 drachmas and DM 8.125 million plus the statutory interest to the Bank of Crete that are being refined by the Greek State. The Piraeus Court of Appeal have started the trial of the Bank of Crete lawsuit against Olympiacos and the Olympiacos recourse to the bank for the 1,050,000 Swiss francs. The money is allegedly related to the transfer of Agapios Kataveridis.