Highly-paid FBME bank ad­min­is­tra­tor quits

Financial Mirror (Cyprus) - - FRONT PAGE -

The Cen­tral Bank of Cyprus, act­ing as the Res­o­lu­tion Author­ity that took con­trol of Tan­za­nia-owned FBME Bank in Cyprus over al­leged money laun­der­ing charges, an­nounced on Fri­day that Spe­cial Ad­min­is­tra­tor Di­nos Christofides re­signed “for per­sonal rea­sons”, ef­fec­tive Satur­day, May 16.

The Cen­tral Bank had last month ap­pointed UK-based re­cov­er­ies ex­pert An­drew An­dron­i­cou as a sec­ond Spe­cial Ad­min­is­tra­tor, who will now take full charge of the bank at a re­port­edly monthly ex­pense of EUR 50,000.

The monthly fee, in ad­di­tion to a 20% mark-up for ex­penses, also al­lows An­dron­i­cou to hire up to four con­sul­tants to help ad­min­is­ter the bank. He was pre­vi­ously called in to try and re­cover as­sets from bank­rupt Or­phanides Su­per­mar­kets, the is­land’s largest re­tailer prior to its col­lapse al­most two years ago.

Christofides was re­port­edly earn­ing EUR 10,000 a month. Pay­ments are de­ducted from FBME de­posits, cur­rently con­trolled by the Cen­tral Bank, with some EUR 270 mln placed in es­crow with the Bank of Cyprus, widely ru­moured in the past as the po­ten­tial buyer of the Tan­za­nia-based bank’s lo­cal branch.








of­ten com­plained that Christofides was not at all co­op­er­a­tive, re­sult­ing in clients’ ac­counts be­ing blocked and trans­ac­tions trick­ling through, the hope is that An­dron­i­cou will at least try and bring the bank closer to nor­mal op­er­a­tions, prior to its sus­pen­sion last July.

The Cen­tral Bank had in­ter­vened af­ter sug­ges­tions made by the US Depart­ment of Trea­sury’s Fi­nan­cial Crimes En­force­ment Net­work (FinCEN) named FBME as “a fi­nan­cial in­sti­tu­tion of pri­mary money laun­der­ing con­cern”. To this day, the FBME share­hold­ers deny the al­le­ga­tions and re­sorted to the Paris-based ICC ar­bi­tra­tion court to have the liq­ui­da­tion and res­o­lu­tion or­ders lifted.

FBME’s share­hold­ers asked the ICC Tri­bunal to set­tle the dis­pute be­fore ir­re­triev­able dam­age is caused to the bank branch in Cyprus by the Cen­tral Bank of Cyprus, the Res­o­lu­tion Author­ity and the ap­pointed Spe­cial Ad­min­is­tra­tor and are seek­ing com­pen­sa­tion for dam­ages of at least $500 mln.

The whole case has also dealt a se­ri­ous blow to the cred­i­bil­ity of the Cyprus au­thor­i­ties that are strug­gling to save face and rebuild the bank­ing sec­tor af­ter its near-melt­down in 2013, re­sult­ing in Laiki Bank shut­ting down and its de­pos­i­tors los­ing their sav­ings, with the op­er­a­tions and debt car­ried over to Bank of Cyprus, the is­land’s big­gest lender, bur­dened with some EUR 11.5 bln in ECB-al­loted emer­gency liq­uid­ity al­lowance (ELA).

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