UPDATE 2-Greek prosecutor files charges over Germanos buyout

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By George Hatzidakis

ATHENS, July 11 (Reuters) - A Greek prosecutor investigating the buyout of retailer Germanos by OTE Telecom's (OTEr.AT) mobile phone arm filed criminal charges on Friday against the two companies' top executives, a court official said.

Greece's largest mobile phone operator Cosmote paid about 1.6 billion euros ($2.52 billion) to buy the country's biggest phone retailer in 2006, but the deal was criticised by the political opposition and some analysts as too expensive.

"After completing an initial investigation, five criminal charges have been laid on OTE and Germanos officials over the buyout," a court official who declined to be named told Reuters.

"Charges of breach of trust have been laid against the chairman of OTE (OTE.N) and Cosmote, Panagis Vourloumis, and members of OTE's board," the official said.

"Charges of money laundering and of being an accessory to breach of trust were laid against (former Germanos CEO) Panos Germanos and the board of directors," the official said.

Prosecutors have been investigating the case for the past two years after the Socialist party's former telecoms minister, Christos Verelis, filed a suit claiming the deal was non-transparent and not beneficial for OTE and its shareholders.

The Socialists lost elections in 2004 to the conservative New Democracy party.

Cosmote financed the purchase by raising debt that some analysts considered too expensive at the time, even though the plan of buying Germanos was seen as a good strategic move.

STRING OF SCANDALS

Friday's developments are the latest in a string of legal headaches that have beset Greek lawmakers recently and follow investigations into whether government officials were bribed by German engineering giant Siemens (SIEGn.DE) to win contracts.

Charges of share price manipulation were also laid against "people associated with the Germanos company", but no names were given.

Officials at OTE, which is partly owned by German telecoms giant Deutsche Telekom (DTEGn.DE), told Reuters they would reserve comment until after they had been officially notified by the courts.

Cosmote saw profits boosted since the deal went through, helped by a large network of outlets to sell its phones and services across Greece and the Balkans.