Cyprus probes Laiki deals with Commerzbank
FRANKFURT (Reuters) – Regulators in Cyprus are investigating transactions made by now-defunct Laiki Bank and arranged by Germany’s Commerzbank. The probe comes after a local lawmaker said the deals might have broken laws that bar a company from purchasing its own stock. Cyprus House of Representatives member Irene Charalambides sent a letter, seen by Reuters, to the Cyprus Securities and Exchange Commission (CSEC) and to Germany’s financial watchdog BaFin, alleging that Commerzbank sold two structured products that acted as vehicles for Laiki to buy stock in itself and affiliates. There are limits on companies buying their own stock without obtaining shareholder approval, to prevent them from surreptitiously inflating their own market price. Charalambides is campaigning to help de- positors in Laiki, once Cyprus’s secondlargest bank, after they lost about 4.3 billion euros last year when the bank collapsed and Cyprus required an international bailout. “We have received a complaint, which the Cyprus Securities and Exchange Commission is investigating in cooperation with German regulators, to ascertain if there is a case or if any violation of laws occurred,” Demetra Kalogerou, president of the CSEC, told Reuters.