Cyprus Mail
Cyprus

Committee of investigation to steer clear of court cases

Committee of Inquiry

By Elias Hazou

THE panel probing the circumstances leading the economy and banking sector to the brink of collapse has decided not to investigate matters that are the subject of court proceedings.

Yesterday’s decision is expected to severely curtail the scope of the panel’s investigations. The decision was taken by majority, with one of the three persons on the committee – former Ombudswoman Iliana Nicolaou – dissenting.

Explaining the decision, panel chairman Georgios Pikis cited a legal reasoning issued by Attorney-general Petros Clerides. Clerides, citing a series of prior Supreme Court rulings, had said that “it would be wrong to expect that, on the issuing of the findings of an investigative committee, a person may be prosecuted.”

Clerides said also that the findings of such panels are handed over to the Attorney-general, who then decides whether they merit criminal investigation.

Relying on Clerides’ feedback, the panel said that when an issue is being contested in civil courts, it is “not permissible for any third party to interject in such a matter.”

And according to the Attorney-general, only court authorities have the power to apportion either criminal or civil liability.

The panel noted that its decision was not an abstract one; rather, it was prompted specifically by two separate issues. The first is a lawsuit filed by the administrator of Laiki Bank – currently under resolution – against 11 former bank executives.

The bank executives – including former Laiki strongman Andreas Vgenopoulos – are 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. The execs’ assets have been frozen by court order.

The second issue relates to an ongoing police/criminal investigation into Bank of Cyprus’ acquisition of Uniastrum Bank. The police are looking into whether kickbacks were given to bank execs as part of the deal.

Therefore, Pikis said, the panel would not investigate anything that may touch upon the police investigation. Instead, the committee of inquiry would limit their probe to the due diligence carried out by Bank of Cyprus in acquiring Uniastrum as well as the financial outcome of the purchase.

Panel member Iliana Nicolaou disagreed. She argued that the decision generally shackles the panel, given the number of lawsuits filed against the two Cypriot banks that underwent a deposits ‘haircut’ as well as against the Central Bank.

Nicolaou expressed the view that the panel could and should look into the Uniastrum deal regardless. She said moreover that a person summoned before the panel has the right to remain silent if they feel that responding may jeopardise their case in court. But that did not mean that the panel should shy away from posing the questions, Nicolaou said.

The three-member committee of inquiry has been dogged by mishaps from the outset. Two of its initial members quit for various reasons soon after the panel was appointed by the President to “probe civil, criminal or political liabilities concerning developments in Cyprus’ banking sector.”

Under the relevant law, the panel is purely an investigative body, and its findings are not legally binding.

One leading lawyer yesterday described the panel’s decision “as eminently legalistic… it sticks too closely to the letter of the law for my liking.”

The source, who requested anonymity, said that in a sense he can understand the decision, given that the panel is “toothless in the first place and does not want to interfere with court proceedings.”

But, the source added, “they should have dispensed with such panels altogether and appointed police investigators from the get-go. After all, are we not talking about alleged theft and corruption in the banks?”

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