Barrage of lawsuits against Aegean, Melissanidis, threats against third parties

In the world of business – especially companies listed in major stock markets such as that of New York – what is written and said about a business is one of the most decisive parameters in judging its ability to maintain investor trust, and to draw capital, seeing the stock maintaining a high value.

For this reason, and because in recent weeks, the most frequent news items in international economic circles regards Aegean Marine Petroleum Network, yet another large American law firm is organising a lawsuit with multiple plaintiffs filing charges of defrauding shareholders, and this is probably not the best type of publicity.

However, it is not just the publicity. In reality, what we are witnessing is the greatest crisis for a company that was supposedly the jewel in the crown among Melissanidis’ businesses. It is a crisis that targets himself and his understanding of how to manage a business.

One notes that all of this began when a group of “activist shareholders”, representatives of funds that do not want to see their investment compromised just because management is playing its own games, managed to block the agreement by which Aegean Marine Petroleum would buy at a high price Melissanidis’ company HEC, specialising in marine waste managemen,t under such terms (offering stocks in a quid pro quo) that would make Melissanidis regain control of a company from which he had withdrawn in 2016, raking in a considerable sum for his stocks.

For the “activist shareholders”, the buyout of HEC was actually a pretext for Melissanidis to regain at not great cost the control of a company listed on the New York Stock Exchange, on terms by which all the other stockholders would make losses.

Thwarting the agreement, which was concluded under the weight of a related lawsuit in the New York Courts, paved the way for a shakeup in the management of Aegean Marine Petroleum, in which the aforementioned shareholders are represented and have the last word, and not those who simply wanted to execute the orders of Melissanidis.

The result of the management changes was an internal audit of the company’s finances, which discovered a number of skeletons in the closet.

First of all, the company discovered that 200mn in receivables “had no foundation”, in other words they were listed in  the company’s assets, but the transactions had simply never been conducted. The announcement that Aegean was writing off those receivables caused a sensation, and led the stock to plunge by 75 percent.

Simultaneously, the investigation revealed a broader range of mismanagement that was not limited only to the listing of non-existent transactions, but also included the payment for the expensive services of a consulting company owned by Melissanidis, and the payment of a high rent for Aegean’s Piraeus offices. Also targeted were officers from the “previous regime” who were removed from the company according to a company announcement.

This picture of protracted mismanagement at the expense of shareholders, and the sense that the former management was acting at the expense of the company and its stock and to the benefit of its own self interest, was enough to whet the appetite of law firms.

This is not simply about the simple filing of lawsuits. These collective lawsuits mean that now the company’s finances will be audited, in order to prove the fraud and to claim claim hefty damages.

The result of such a procedure will be to bring to light more skeletons in the closet, and the previous management and Melissanidis will be the target of the American justice system.

At the same time, the  more the practices of the Melissanidis era are the object of lawsuits and courts, all the more will the current management of Aegean, in an effort to regain investor trust, attempt not  only to separate itself from him, but also to demonstrate that it is willing to confront mismanagement.

It is also obvious that the entire development is a major blow for Melissanidis himself.

Aegean Marine Network Petroleum was his main international company, upon  which he was building his international activity, which to a great extent involved transactions of other companies of his with this one.

By ceasing these transactions, he faces a broader problem, so he is necessarily pulling back only with his Greek business activity.

Moreover, possible judicial complications with American authorities will have serious repercussions on both his business activity and his public presence as a player in the field of athletics.

All of this explains Melissanidis’ anxiety and why he is returning to practices in which he had earned distinction, such as threatening journalists simply because they reported on problems that he faced with his businesses.

The latest victim, as he himself revealed, was FMVoice publisher Nikos Manesiotis, who featured a report on Melissanidis’ activities in the US.

Manesiotis charged that Melissanidis called him on the telephone, hurled insults at him, and threatened to “blow his home up in the air”.