By Staff Reporter
THERE was uproar yesterday after a list was published detailing how many deputies owed money to, and how many had non-performing loans with Bank of Cyprus, prompting a weekend of back-to-back meetings for President Nicos Anastasiades in an attempt to resolve the crisis.
In a related development, Attorney-general Costas Clerides ordered a criminal probe into an alleged bribe involving his deputy Rikkos Erotokritou over loans and deposits he had with Laiki Bank.
Both controversies link back to remarks made by Central Bank Governor Chrystalla Georghadji who was yesterday called on to resign by furious deputies.
“The least the central bank board could do is resign,” said Demetris Syllouris, the chairman of the House ethics committee said.
Georghadji told lawmakers on Thursday at a session of the House Ethics committee that the monetary authority drafted a list of lawmakers with non-performing loans (NPL) at Bank of Cyprus.
She said the list was put together in the same way the UK does with respect to politically exposed persons. The chairman of the committee spoke earlier of an attempt by the central bank to blackmail lawmakers through leaks to the press with information about their loan arrears.
The implication was that MPs had a vested interest in moulding the suspended foreclosures law to suit their own needs.
The list of 37 members of the 56-seat parliament was published in daily Politis yesterday causing a stink in the political arena.
It showed that out of the 37 MPs listed, 19 owed the BoC a total of €51.2m and 13 of those had NPLs totaling €35.3m. Their total combined collateral stood at €47.1m. In addition, 20 out of the 37 were guarantors for loans worth €72.9m.
Bank of Cyprus said in a statement that it had prepared the list in order to comply with its obligations towards the central bank in its role as supervisory authority but expressed its disappointment that the list had been published.
“Personal data management and bank confidentiality are extremely important issues and Bank of Cyprus shares its customers’ disappointment and anger,” the lender said.
It said that while the bank did not comment on its customers’ accounts, in the case of the political leaders included in the list, and following communication with them, the overall amounts listed as obligations of DISY leader Averof Neophytou and AKEL leader Andros Kyprianou, included obligations related to their respective parties. Something similar applied in the case of AKEL deputy Nicos Katsourides, the bank said.
“We express our deep concern for the inconvenience and uncertainty caused at an institutional level, at a time when the banking system and the economy in general, following their stabilisation, have entered a recovery course,” the BoC statement said.
Economic recovery should not be jeopardised while supervisory stability has to be maintained “one way or another,” the lender said.
Almost all parties, and those politicians on the list yesterday, expressed their fury over the leak either denying that their loans were non-performing or offering clarifications.
DISY’s Neophytou said that the BoC statement had said it all.
“When uproar and leaks aim at serving other purposes than transparency, they cause damage to the economy, the financial sector and the country’s credibility,” Neophytou said. “The country wants, and society demands that key people within the country’s financial system and economy act more responsibly and seriously,” he added, in a clear reference to Georghadji.
Andros Kyprianou, secretary-general of AKEL, said he would take legal action against all those who included and leaked his name on lists “with non-performing loans”.
“The truth is that I do have loans,” Kyprianou said in statement, adding that neither the preparation nor the publication of such a list could prevent AKEL from demanding justice.
Hitting out at BoC he said: “If [CEO John] Hourican or anyone else believes that we could change our political position on foreclosures or other issues with such practices, that is mistaken.”
Hourican came under attack by political parties in early February after comments he made in an internal email leaked to the press in which he criticised the “bemusing politicisation of the insolvency law”.
Lawmakers in December suspended implementation of the foreclosure law citing the government’s delay in submitting a legislative framework on insolvencies, which prompted Cyprus’ international creditors to freeze bailout funds.
Kyprianou added that he had instructed an accounting office to prepare a list of his family assets and financial obligations which he would give to the public.
DIKO said that its MPs would “immediately” submit to the House president statements with their non-performing loans and financial obligations
“Getting a loan either in the case of a member of parliament or any other person, is not wrong,”
DIKO said in a statement. “What is wrong, is when a deputy’s personal interest determine his
voting behaviour,” as well as when deputies use their office to get better treatment from the banking system.
Georghadji’s actions came to light earlier in the week when Stelios Kiliaris, one of the central bank’s executive directors quit citing a rift with the governor over the list.
“She is running (the central bank) like a little shop,” Kiliaris said. He said Georghadji had aimed to pressure her detractors by compiling the list.
“She was holding this list last Monday … she made very serious innuendos about lawmakers who shouldn’t be looking at her own conflict of interest,” Kiliaris told state radio.
Georghadji has denied Kiliaris’ allegation, and has also denied saying that law firm Andreas Neocleous & Co. LLC had bribed the deputy attorney general Rikkos Erotokritou in the Laiki controversy.