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Greek state racing firm CEO arrested in debt case

Associated Press

ATHENS, Greece (AP) – The head of Greece’s state-controlled horseracing company was arrested Wednesday on charges that the corporation withheld taxes and owed debts of euro83 million ($109 million) to the state, officials said.

The detention of Alexandros Zaharis, head of Horseracing Organization of Greece SA., or ODIE, is the latest of several arrests for debts to the state in the near-bankrupt country. But it is the first involving an official from a company in the broader state sector.

A police official confirmed Zaharis’ arrest on condition of anonymity in line with police rules.

Police say ODIE failed to pay the state some euro277,000 ($365,000) in withheld taxes on profits and a further euro741,000 ($976,000) in other dues between January and May 2011, in addition to the euro83 million debt.

The criminal charges, if proved in court, carry a minimum five-year prison sentence.

Greece, the country at the heart of Europe’s financial crisis, is under intense pressure from its international bailout creditors to contain large budget deficits and slash public spending.

Beset by flagging revenues, rampant tax evasion and an inefficient tax collection system, the government has toughened tax fraud laws and cracked down on debtors, naming more than 4,000 individuals from the private sector who allegedly owe up to euro1 billion ($1.3 billion) in taxes.

In the second half of December alone, 492 arrest warrants were issued over debts to the state and tax evasion, the financial prosecutor’s office said Wednesday.

A list of corporate debtors was topped by the state railways and included several public sector entities.

Total outstanding debts to the state reach an estimated euro60 billion ($78 billion) _ little more than a tenth of which is seen as collectible.

ODIE, which is fully state-owned, is due for privatization this year under the government’s ambitious plans to sell or lease euro50 billion ($66 billion) worth of state assets by 2015.

The privatizations are part of a program of harsh austerity and sweeping market and public sector reforms pledged in return for the international rescue loans that are keeping Greece solvent.

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