Cyprus Mail

AG felt obliged to order BoC probe

By George Psyllides

ATTORNEY-general Petros Clerides yesterday suggested he had been pressured into ordering an investigation into the Bank of Cyprus’ (BoC) costly acquisition of a small Russian bank in 2008.

Clerides had previously judged no criminal offences had been committed in the purchase of Uniastrum but a letter from DIKO chairman Marios Garoyian apparently changed his mind.

Clerides had found nothing in a findings report on the acquisition compiled by financial forensic experts Alvarez and Marsal.

The findings, made public in April, said that the bank went ahead with the purchase despite misgivings in due diligence reports and a legal opinion that judged it could opt-out of the deal or renegotiate the acquisition price.

The same probe had said it found no evidence of corruption.

BoC, now temporarily under the control of a central bank-appointed management, acquired 80 per cent of Uniastrum for €371 million in November 2008.

Appearing before an investigating committee looking into the economic debacle, Clerides said Garoyian’s letter clearly implied specific criminal offences had been committed, putting the onus on the attorney-general to investigate.

“I could not shake off this weight, we all have dignity and some times we must defend it even if we are forced to defy certain thoughts we considered more appropriate,” Clerides said. “It would have been more proper to let the investigating committee complete its work without distractions because parallel investigations … do not contribute positively to the investigation of a case.”

The island’s top lawyer said if any criminal offences were detected by the committee then the attorney-general would be obligated to investigate.

Clerides said he was not qualified to answer certain questions posed by Garoyian, rather they feel under the committee’s terms of reference.

“It does not concern the attorney-general if the acquisition of the Russian bank was successful,” Clerides said.

The same went for the procedures followed in managing the bank’s finances, he said.

The remaining 20 per cent share of the Russian bank is held equally by Russian businessmen Georgy Piskov and Gagik Zakaryan, both of whom were interviewed by Alvarez and Marsal.

Garoyian had said the Alvarez and Marsal report on the purchase of the Russian bank contained “signs and wonders,” but also provided Clerides with additional information.

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