Who is Lebanon Central Bank chief Riad Salameh?

The reputation of one of the longest-serving central bank heads in the world comes crashing down under an avalanche of legal cases

Lebanon's central bank governor, Riad Salameh. AFP

Riad Salameh, once celebrated as the guardian of Lebanon's financial sector, now faces two arrest warrants, an Interpol notice, and accusations of embezzling more than $330 million from the Lebanese Central Bank.

These accusations coincided with the fall of the Lebanese economy, which began in 2019 and has led to Lebanon's currency losing 98 per cent of its value today.

So how did he go from lauded finance expert to the subject of more than seven court cases?

Who is Riad Salameh?

Mr Salameh, born on July 17, 1950, in Antelias, Lebanon, is from a successful business family with a Christian Maronite background, long established in Liberia, West Africa, which is home to a big Lebanese community.

He has Lebanese and French citizenship.

He attended the prestigious College Notre-Dame de Jamhour and later pursued a degree in economics at the American University of Beirut, where he met Nada Karam, an author and artist, with whom he had four children – Nadi, Nour, Rana and Reem.

After his graduation in 1973, Mr Salameh joined Merrill Lynch, the American investment and wealth management company, where he worked until 1993.

That year, he was appointed governor of the central bank by Prime Minister Rafic Hariri, for whom he had previously managed a personal asset portfolio at Merrill Lynch.

His mandate was renewed four times, with the last ending on July 31, 2023, making him one of the longest-serving central bankers in the world.

Regarded as a "wizard of finance", he earned praise domestically and internationally for maintaining financial stability for more than two decades and keeping the local currency's stability at 1,507 Lebanese pounds to the dollar since 1997, despite political uncertainty.

He has received numerous international medals and distinctions from political and financial authorities.

France, which has now issued an arrest warrant for the governor, previously conferred upon Mr Salameh the highest French distinction, Knight of the Legion of Honour, by Jacques Chirac in May 1997. He was promoted to Officer of the Legion of Honour by Nicolas Sarkozy in 2009.

The aura surrounding Mr Salameh was at the time so powerful that no one questioned the governor, his policies, or his enormous real estate portfolio – which the judiciary later suspected he acquired with public funds.

Lebanon's economic crisis crushed the illusion for the general public.

What happened in 2019?

In October 2019, depositors suddenly realised that their high-interest-rate deposits were an illusion, with no real backing in dollars.

Many started to denounce Mr Salameh's huge Ponzi scheme, where the promises of very high returns hid a scheme that relies solely on attracting new depositors to pay returns to earlier investors, rather than generating legitimate profits through exports or investments, for instance.

This triggered an unprecedented financial crisis, causing estimated losses of $70 billion in the financial sector, and locking people out of their savings.

Yet Mr Salameh is not under investigation for his management of the crisis.

In 2021, Switzerland launched an investigation into allegations of money laundering linked to the discovery of suspicious transfers from an account at the Banque du Liban to Europe.

Following this, France, Germany, Luxembourg, Liechtenstein and Belgium initiated their own investigations.

After three years of investigation, they uncovered a complex scheme that allegedly siphoned hundreds of millions of public funds through a secret brokerage contract with Forry Associates, an obscure company based in the British Virgin Islands. Lebanese banks were unknowingly paying a commission to Forry, which is owned by the governor's brother, each time they purchased financial instruments from Banque du Liban, with no corresponding services in return.

The commission proceeds enabled Mr Salameh and his relatives, including his long-time romantic partner Anna Kosakova, whose existence was revealed by the investigation, to amass a vast real estate empire in Europe.

His decades-long term as Central Bank Governor ends on 31 July.

Despite our request for comment, Mr Salameh has not responded to our queries. He previously denied that any public funds entered his account and denounced what he described as an attempt to make him the scapegoat for Lebanon's financial meltdown.