Realtors' president refers to 'pyramid' involving Golden Visa-linked property purchases via Chinese brokers, POS payments

Thursday, 01 November 2018 12:48
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By T. Igoumenidi

A very high-profile case involving alleged capital control violations in far-off China linked with property purchases in Greece, combining the export of capital via POS transactions with the "Golden Visa" program in the east Mediterranean country, suddenly shifted attention to the recently resurrected urban real estate market in the recession-battered country.

Reports that China central bank authorities are investigating up to 40 million euros worth of property purchases in Greece by Chinese citizens through a company set up by a top Greek retailer's executive vice-president sent ripples through the market, and reportedly generated an initial probe by a local prosecutor.

Nevertheless, the president of the federation of Greek realtors, Ioannis Revithis, on Wednesday said there was "no surprise in the sector over the specific 'pyramid' in transactions between Chinese buyers and the well-known businessman."

According to Revithis, the case is not unique.

"It's well known to all that certain groups of people, in cooperation with Chinese brokers, purchased numerous apartments (usually in the greater Athens) for dirt cheap prices, which they later transferred to individual Chinese citizens, earning thousands of euros through this process, and with the final buyers also picking up a residence visa in our country," he said.   

He also explained how, in his view, the multiple property transaction scheme, one linked to the "Golden Visa" program, works.

"... Chinese (broker) agencies would purchases numerous residences (in central Athens) at prices significantly lower than 250,000 euros... in other words, at their real market value," Revithis said, citing the figure needed to apply for the specific residency visa program in Greece.

"... in turn, they (brokers) would find an individual Chinese buyer, who, for instance, would pay 250,000 euros for an apartment worth 100,000 euros, so that the transaction would be declared to (Greek tax) authorities in order to receive the 'Golden Visa'. Afterwards, after retaining a portion of the transaction price as its commission, the broker would return a previously agreed-to sum (the difference between the declared 250K payment with the real market value) to the buyer back in China, money appearing as 'profit' by the Chinese broker's Greek subsidiary."

Revithis said the level of the commission was not known, but said it was very high.

The case first revolved now resigned Jumbo group executive Evangelos Papaevangelou, who tendered his resignation from the company's board of directors a day earlier. Jumbo is one of the largest toy and children's retailers in southeast Europe.

Papaevangelou has established a real estate holding and management company over the recent period - completely separate from Jumbo - that aggressively entered in the property sector in the east Mediterranean country, as well as in bidding in e-auctions.  

Regulators in Beijing are focusing on POS payments - via Greek banks - by PRC nationals to acquire property in Greece, thereby taking advantage of the visa program.   

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