Court case against ex-BoC officials to be heard on Friday

The hearing in a case against five former executives of the Bank of Cyprus will take place on Friday when the defence will argue that for a dismissal, following a continuance allowed by a Nicosia court judge two weeks ago.

The bank’s former chairmen Theodoros Aristodemou and Andreas Artemi, CEOs Andreas Eliades and Yiannis Kypri, as well as Deputy CEO in charge of Greece, Yiannis Pehlivanides, face charges of market abuse and conspiracy to deceive investors as they failed to notify shareholders that the bank’s capital needs in 2012 had risen significantly more than the EUR 200 mln initially announced.

By the time the real picture had been calculated, the shortfall was estimated to have reached about EUR 700 mln, which, when combined with the write-down (haircut) of Greek government bonds imposed by EU leaders in November 2012, sent the bank into a free-fall and unable to sustain itself or even by government help.

As a result, when now defunct Laiki Popular Bank failed, also exposed to huge amounts of GGBs (prodded by the then Greek government of George Papandreou), Bank of Cyprus was unable to carry the burden, Cyprus banks were forced to sacrifice their Greek franchises and BoC was straddled with the EUR 11 bln emergency liquidity assistance (ELA) issued to Laiki.

In the ongoing trial, an effort to find a scapegoat for both banks’ failures which a public probe could not pinpoint, defence counsel Polys Polyviou raised an issue deciding on due process prior to any admissible facts being heard first.

Polyviou speaking on behalf of the Bank of Cyprus had suggested earlier that the case started by examining whether there had been an abuse of process. If the court rules that this is the case then it will be dismissed or suspended, he said, adding that if it doesn’t then it will continue. He further expressed his readiness to present his arguments.

Assize Court judge Lena Demetriadou, who heads the three member panel, granted a postponement until March 27, saying that on the set date the Court will hear the parties’ arguments regardless of whether there is agreement on the admissible facts.

Polyviou added that it is his opinion there aren’t many admissible facts referring in particular to a decision by the Cyprus Securities and Exchange Commission, the appeal or appeals before the Supreme Court against that decision and the present indictment.