FBME con­tin­ues me­dia pres­sure on CBC with ‘open let­ter’ to Pres­i­dent

FBME Bank, the Cyprus arm of the Tan­za­nia-based lender whose li­cense was re­voked by the Cen­tral Bank of Cyprus last week, on the grounds of al­leged money laun­der­ing, has lashed out at the gov­ern­ment in an open let­ter to the Pres­i­dent, chal­leng­ing his neut

Financial Mirror (Cyprus) - - FRONT PAGE -

The open let­ter, signed by FBME Chair­man Ay­oub-Farid Saab, said that af­ter 17 months of the CBC’s mis­man­age­ment of this branch, dur­ing which time the CBC also closed the sub­sidiary FBME Card Ser­vices, and has de­nied ac­cess by or­di­nary de­pos­i­tors to their own ac­counts.

Now, Saab said, the liveli­hood of a fur­ther 250 of the bank’s employees is un­der grave threat while the CBC con­tin­ues its ef­forts to send the bank to its grave. Thi fol­lows the in­com­pe­tence the CBC has shown in ac­tions with Cyprus’ three sys­temic banks, all also un­der its suprvi­sion and reg­u­la­tion.

“It is our con­tention that a small group of CBC of­fi­cials, pos­si­bly col­lud­ing with out­siders, have made a sac­ri­fi­cial offering of FBME to a USA gov­ern­ment agency com­pletely with­out jus­ti­fi­ca­tion,” Saab wrote.

The CBC an­nounced on Mon­day, De­cem­ber 21, that it had re­voked the bank­ing op­er­a­tion li­cense of the Cyprus branch of FBME Bank, end­ing a long dis­pute over the Tan­za­ni­abased bank’s sus­pected deal­ing with money laun­der­ing, ac­cord­ing to the US Trea­sury con­clu­sions.

But the bank, which had al­ready con­tested the CBC’s sus­pen­sion and ap­pealed to the Paris-based In­ter­na­tional Cham­ber of Commerce, re­sponded with a state­ment say­ing that it will launch a le­gal fight against the “un­founded CBC li­cense re­vo­ca­tion.”

“FBME Lim­ited has an­nounced that im­me­di­ate le­gal ac­tion is be­ing launched to con­test the re­vo­ca­tion by the Cen­tral Bank of Cyprus (CBC) of FBME Bank’s li­cense for its branch in Cyprus and is chal­leng­ing this De­ci­sion in front of Cyprus Courts,” it said last week.

“The re­vo­ca­tion, com­mu­ni­cated in a nine-page dec­la­ra­tion, blames oth­ers for ac­tions caused and taken by the CBC Board over the past 17 months, which stem from CBC’s uni­lat­eral takeover and at­tempted sale of FBME Bank’s branch in Cyprus. FBME re­jects this Re­vo­ca­tion of Li­cence in its en­tirety.”

“CBC’s il­le­gal mea­sures against FBME, of which this is the lat­est, have led to law­suits in Cyprus and abroad, ex­pos­ing the Cyprus au­thor­i­ties to a spi­ral of claims for sub­stan­tial dam­ages and com­pen­sa­tion.”

In an­other an­nounce­ment last week, the FBME said “it is clear that the real guilty par­ties are a small co­terie of CBC of­fi­cials and some shad­owy fig­ures ex­ter­nal to the or­gan­i­sa­tion. There is very lit­tle doubt that they had prior knowl­edge of the orig­i­nal mea­sures to be taken by the US gov­ern­ment agency FinCEN against FBME and prob­a­bly col­luded in their prepa­ra­tion.

“Now that the US courts are ques­tion­ing the FinCEN mea­sures and have or­dered that th­ese be re-ex­am­ined, the CBC is be­ing ex­posed. Sim­i­larly, the de­ci­sion of the in­ter­na­tional ar­bi­tra­tion tri­bunal at the ICC in Paris to con­sider the claims of the plain­tiffs, the ben­e­fi­cial own­ers of FBME, in re­spect to dam­ages and com­pen­sa­tion against the Repub­lic of Cyprus, brings even more risk to those around the ta­ble who con­cocted this episode in the first place. Fi­nan­cial penal­ties will be di­rected at the Repub­lic of Cyprus, and the coun­try’s tax­pay­ers and their elected rep­re­sen­ta­tives will de­mand to know who has caused this calamity.”

In an ear­lier open let­ter also ad­dressed to the Pres­i­dent of the Repub­lic, for­mer At­tor­ney Gen­eral Alekos Markides, act­ing on be­half of the own­ers of FBME Bank, out­lined the se­ries of le­gal vic­to­ries FBME has se­cured in over­seas courts and ar­gued that it is the Repub­lic as the state that shall be left li­able and ex­posed and not the Cen­tral Bank of Cyprus as an in­de­pen­dent institution.

Markides ar­gued that in the case of FBME the Cen­tral Bank’s has acted as Res­o­lu­tion Author­ity and there­fore not in its role as an in­de­pen­dent institution of the Repub­lic.

This in ef­fect leaves the State at risk of hav­ing to pay com­pen­sa­tion de­scribed as a “huge sum” at the ex­pense of the tax payer. The Res­o­lu­tion Author­ity, claimed Markides, has failed to sell the bank and has been act­ing ar­bi­trar­ily and il­le­gally and in a man­ner aimed at cov­er­ing up its re­spon­si­bil­i­ties, more re­cently by plan­ning to liq­ui­date the bank. This, he added, is a prospect that will have fur­ther dev­as­tat­ing ef­fects on all con­cerned.”

In Au­gust, the US agency FinCEN, on the ba­sis of whose now dis­puted find­ings FBME was placed un­der ad­min­is­tra­tion, had to re-open its pe­riod for assem­bling and as­sess­ing ev­i­dence to late Jan­uary 2016 af­ter a US court halted its at­tempt to im­pose its Fi­nal Rule on FBME Bank.

Markides con­cluded by call­ing on the Pres­i­dent to con­vene and chair a meet­ing with the Min­is­ter of Fi­nance, the Res­o­lu­tion Author­ity and the ben­e­fi­cia­ries of FBME Bank so as to dis­cuss the prospect of find­ing con­struc­tive so­lu­tions to safe­guard the in­ter­ests of all con­cerned.

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.