First crooked banker ar­rests by end-year

Financial Mirror (Cyprus) - - FRONT PAGE -

Pres­i­dent Ni­cos Anas­tasi­ades has set an am­bi­tious tar­get to make the first ar­rests of crooked bankers that led to the econ­omy’s col­lapse by the end of the year.

Lax su­per­vi­sion by state and Cen­tral Bank of­fi­cials, se­nior bankers, as well as board mem­bers re­sulted in Cypriot banks buy­ing bil­lions of euros worth toxic Greek gov­ern­ment bonds, dec­i­mat­ing their cap­i­tal re­serves that were writ­ten down by common decision of EU lead­ers, in­clud­ing then Pres­i­dent Demetris Christofias.

As a re­sult, Laiki Popular Bank and Bank of Cyprus, re­ported losses of more than a bil­lion euros each, with the first bank forced to shut down and taken over by the lat­ter, whose de­pos­i­tors were sub­jected to a bail-in and be­came the bank’s new share­hold­ers.

Fur­ther in­com­pe­tence by man­agers and direc­tors saw un­con­trolled flight of cash, as well as dish­ing out loans by the bucket load, with mort­gages now worth more than the prop­er­ties and the bank­ing sys­tem bur­dened with non­per­form­ing loans (NPLs) reach­ing nearly 50% of their loan­books.

The fi­nal blow to the Cypriot banks was when the cen­tral bankers of Cyprus and Greece col­luded to take over the Greek op­er­a­tions of Laiki, Bank of Cyprus and Hel­lenic Bank and sold to Pi­raeus Bank for a frac­tion of their worth.

Pres­i­dent Anas­tasi­ades took part at the meet­ing of the Fi­nan­cial Crime In­ves­ti­ga­tion Bureau (FCIB), housed at the Filox­e­nia con­fer­ence cen­tre in Nicosia, where he was briefed in de­tail by the At­tor­ney Gen­eral and the Head In­ves­ti­ga­tor for the course of in­ves­ti­ga­tions so far.

In state­ments after the meet­ing, Anas­tasi­ades said that he was briefed on the var­i­ous of­fenses that seem to have been per­pe­trated by var­i­ous bank­ing of­fi­cials.

“I have been briefed over the state of in­ves­ti­ga­tions so far, con­cern­ing spe­cific crimes,” he said, adding that there will be a reg­u­lar brief­ing ev­ery month on the progress made.

The Pres­i­dent said that the state will show “zero tol­er­ance” to­wards ev­ery at­tempt to cover up any­one in­volved in any crime.

A thor­ough in­ves­ti­ga­tion and the pun­ish­ment of those re­spon­si­ble for the demise of Cyprus’ fi­nan­cial sys­tem are a wider so­cial de­mand as well as the state’s ob­jec­tive, the Pres­i­dent added.

More­over, he dis­missed crit­i­cism over de­lays or coverup at­tempts, not­ing that the amount of time re­quired to put for­ward the ev­i­dence is due to Cyprus’ aus­tere le­gal sys­tem.

He said he was sat­is­fied with the course of in­ves­ti­ga­tions and noted that progress will be­come ev­i­dent in the next few weeks with the re­sults to be pro­duced by the in­ves­ti­ga­tors.

Re­ports sug­gest that within “the next few weeks” two dossiers of pros­e­cu­tion files will be con­cluded, that will con­tain six or seven cases each that re­fer to the ac­tions of bank board mem­bers from 2009 to 2011.

At the same time, pros­e­cu­tors are headed to Athens to co­or­di­nate their in­ves­ti­ga­tions with the Greek au­thor­i­ties so as there is no le­gal over­lap or loop­hole in any of the cases. On the other hand, the su­per server that was sup­posed to have been pur­chased to store the im­mense vol­ume of data and to be able to process them at a fast pace has not been de­liv­ered yet as the au­thor­i­ties have yet to fi­nalise the sup­ply con­tract and the hir­ing of spe­cial­ist from a UK-based ad­vi­sory firm to run the pro­grammes.

The FCIB has al­ready hired two lo­cal bank­ing ex­perts, two ac­coun­tants who had pre­vi­ously as­sisted with the au­dits at the Co­op­er­a­tive Cen­tral bank, and an ex­pert who had been hired by the House Watch­dog Com­mit­tee to in­ves­ti­gate the bank­ing sec­tor’s and the econ­omy’s col­lapse.

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