MARFIN Investment Group (MIG) Executive Vice-Chairman Andreas Vgenopoulos may be a lot of things – lawyer, banker, consummate politician, showman, brash Athenian – but he’s certainly no mug when it comes to making money.
Vgenopoulos is known to be a careful strategic planner. According to a well-informed source, the full range of possible repercussions of the recently-announced proposal to restructure the Marfin banking group and transfer its headquarters to Greece had been studied for more than a year before it was made public.
On past evidence, clearly Vgenopoulos is also a brilliant salesman, able to turn on the charm or use Athenian brashness to further his schemes. In September 2006, when he was in Cyprus on one of his regular visits to convince the shareholders of what was then Laiki/Popular Bank to vote for a merger with Marfin, he chose to flatter shareholders, politicians and government officials alike.
He said that the reason why the Laiki-Marfin “regional banking colossus” would be headquartered in Cyprus was because of Laiki’s 100-year tradition, and confidence in the stability of the Cyprus economy as well as its prospects – and, of course, because of its strategic geographical position. He neglected to mention the fact that in Cyprus, the tax on corporate profits is a third of what companies pay in Greece.
When told by financial market professionals during the same visit that the valuation of the Marfin shares was too high, he turned nasty, saying: “You want us to absorb you at a given price? If you don’t like it, we have other ways to buy you out and you can go home.”
Vgenopoulos has proved he is prepared to make any alliance he deems necessary. During his effort to cement the Laiki-Marfin merger into place, he gave a well-paid job to the daughter of ETYK banking union leader Loizos Hadjicostis, and another senior job to the son-in-law of then Central Bank (CB) Governor Christodoulos Christodoulou. It also emerged in April 2007, when Christodoulou was about to be replaced as CB Governor, that Marfin Egnatia Bank was a shareholder in the Institute of Banking Studies, owned by Christodoulou’s family.
He has also cultivated Archbishop Chrysostomos. In February 2007, Marfin sold its share of Hellenic Bank – then the island’s third largest lender – to the Archbishopric. Vgenopoulos said at the time that the reason behind this transaction was to respect the Church’s wish to protect Hellenic Bank from hostile takeover bids.
Vgenopoulos sees himself as a straight-talker. Last week, he said: “Every time I open my mouth, I end up having to pay a [Securities Commission] fine.” However, his statements can throw up contradictions. Last November, he expressed his apparent satisfaction that the “conservatism” of the Central Bank was one of the factors that had shielded the Cypriot banking sector from needing to be bailed out. Last week, he lambasted the Central Bank’s “conservatism” as being an obstacle to expansion.
Similarly, in September 2006, he said that locating the banking group’s headquarters in Nicosia was “fully in line with our strategy for expansion in south-east Europe”. Last week he told the AGM of Marfin Popular Bank (MPB) that the group’s headquarters would be moving to Athens to “improve the Group’s strategic flexibility in terms of potential expansion in the Greek market and south-east Europe”.
Clearly, Vgenopoulos has a big ego, the kind of arrogance that is common in successful corporate businessmen – after all, strong self-belief is a prerequisite when billions are riding on your decisions. There is no denying his business achievements, as for the most part he has significantly increased the size and value of businesses he has become involved in. Oh, and he is said to be personally worth €800 million, which would tend to boost your confidence.
In Wall Street parlance, an executive who brings in large amounts of money into the firm is referred to as an “alpha male” or a “big swinging dick”. One can only guess what Vgenopoulos has been called by his enemies in Cyprus over the last week or so.
Speaking at MPB’s AGM last Tuesday, Vgenopoulos had blasted what he saw as the nepotism, gerontocracy, bureaucracy, cosy arrangements and dirty tricks that operate here, launching a series of broadsides against everyone he felt had obstructed his business plans.
Some of his comments at the AGM were certainly off-the-cuff, and the occasional flashes of anger were genuine, but there can be no doubt that his full-frontal public attack on Cyprus’ institutions, regulatory authorities and establishment circles was deliberately calculated to “shake the tree”. The question now, of course, is what might drop – and when.
Voices are now being heard to say that “something needs to be done” to keep MPB’s headquarters in Cyprus. Most people would probably bet that nothing substantial will be done and that the MPB “restructuring” will go ahead – but that won’t be because Vgenopoulos meekly accepted the position of the Cypriot authorities.
Sun Tzu’s The Art of War, written in the 6th century BC, is one of the oldest and most successful books on military strategy in the world. But it has also had a huge influence on business thinking, especially in terms of corporate strategy and tactics. Sun Tzu recognised the importance of positioning in strategy, and the fact that position is affected both by objective conditions and the subjective opinions of competitive actors.
He taught that strategy was not planning in the sense of working through a to-do list, but rather that it requires quick and appropriate responses to changing conditions. Planning works in a controlled environment, but in a competitive environment, competing plans collide, creating unexpected situations. These can be used advantageously, especially by those who have anticipated or even manufactured the collision.
Sound familiar?
At the end of MPB’s AGM last Tuesday, the Sunday Mail asked Vgenopoulos: If, sometime in the future, the restructured banking group identifies an opportunity to merge with or take over another bank which offers a bigger network, growth potential and profit, would it not be logical to sell the profitable Cyprus operations for a good price and apply the funds to the new opportunity?
Vgenopoulos’ answer was very clear: “There is no question of doing such a thing. We [MIG] have been in the market for 12 years, and we have never sold anything, only bought. The matter has been settled for some time now. We will never leave Cyprus – ever. Everyone who wants to get rid of us will grow tired of hunting us.”
The trouble is, it is not strictly true that MIG has “never sold anything”. For example, on 17 March 2008, MIG announced it had sold its 20 per cent stake in Greek telecommunications company OTE to Deutsche Telekom, triggering criticism from Greek politicians.
So we know that the current strategy can change, depending on what other opportunities present themselves. Only time will tell whether the Cyprus operations will remain at the core of a restructured Marfin banking group.
[SIDEBAR / BIO]
Andreas Vgenopoulos, aged 56, was born in Athens. He graduated in law from Athens University, and founded the law firm Vgenopoulos & Partners. He worked for several large Greek shipping companies before forming Maritime Finance (Marfin) in 1998.
– Executive Vice-Chairman of Marfin Investment Group (MIG).
– Executive Vice-Chairman of Marfin Popular Bank.
– Executive member of the board of Marfin Egnatia Bank S.A.
– Vice Chairman of the Board of Hygeia S.A., MIG’s Greece-based investment arm in the healthcare services sector, which is engaged in the controlling and managing of general and maternity hospitals in Greece and south-easter
n Europe.
– Non-Executive Vice Chairman of the Board of Vivartia S.A, MIG’s Greece-based food sector conglomerate, one of the 50 biggest companies in Europe. It owns a number of major Greek brands, including Delta dairy products, Goody’s, Flo Café, Barba Stathis and Chipita.
– Major personal shareholder of Panathinaikos FC since 2008, owning 20 per cent of the club.
