Cyprus probes Laiki deals with Com­merzbank

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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.

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