By George Psyllides
A CYPRIOT court has frozen assets worth around €5.3 billion belonging to former Laiki Bank strongman Andreas Vgenopoulos and two other people, the Central Bank (CBC) announced yesterday.
The interim court orders, which have a global reach, were secured by the administrator overseeing the resolution of Laiki, formerly the island’s second-biggest lender.
The court froze assets belonging to Vgenopoulos and former Laiki CEO Efthimios Bouloutas worth €3.79 billion and those belonging to former board member Kyriacos Magiras worth €1.5 billion.
It also banned Vgenopoulos’ Marfin Investment Group (MIG) Holdings SA from making any payments or transfers to the benefit of the three men.
A hearing concerning the orders will be held on June 11.
The orders were secured after a lawsuit was filed against the trio and eight other former Laiki executives — including CEO Christos Stylianides — and MIG, demanding damages for several reasons.
The defendants were accused of granting unsecure or insufficiently secured loans or loans that entailed undue risk, violating prudent banking practices, and insufficient supervision and management in relation to the merger between Greece’s Marfin Egnatia and Laiki.
Vgenopoulos, Bouloutas and Magiras were accused of acting in a devious manner.
From the three and MIG, Laiki is demanding compensation for the loss incurred through the merger due to a conspiracy between the four.
A court ruling was also sought that any money related with the claims in the suit will be transferred to the bank.
Vgenopoulos is widely viewed as being responsible for Laiki’s eventual downfall, which started when it merged with Greece’s Marfin Egnatia bank.
He denies any wrongdoing.
“The positive thing in these developments is that all claims are led before justice so that the mud slinging and slander will be finally dealt with court decisions,” Vgenopoulos said in a statement yesterday.
“Eighteen months after the departure of Laiki’s management under my chairmanship, no relevant evidence of deceit or illegal personal gain has been exposed, simply because none exists.”
He added that Cypriot courts were not authorised to deal with the case and appeared certain he would be vindicated in the end.
Vgenopoulos blames Cypriot authorities for the demise of the bank because they mistakenly accepted the EU-sanctioned write-down of Greek debt in October 2011.
The write-down proved costly.
Cyprus was forced to shut down Laiki 18 months later and impose massive losses on depositors in Bank of Cyprus second bank to keep it afloat and get €10 billion in aid from international lenders.
MIG has said it would seek compensation via an international arbitration tribunal after its 9.5 per cent stake in Laiki in 2006 whittled down to less than 1.5 per cent.
A Greek parliamentary enquiry had called attention to “serious conflicts of interest” in Laiki’s Greek operation.
It had loaned money to a community of Greek monks involved in land deals and to others who used the money to support a share sale by Marfin Investment Group, a company linked to Laiki through a shared chairman – Vgenopoulos — until November 2011.