Cyprus Mail
Cyprus

AG orders criminal probe into economic crisis

By Poly Pantelides

THE ATTORNEY-GENERAL has ordered a criminal investigation into the circumstances bringing the economy and the banking sector close to collapse with the state’s legal services and police due to meet on Thursday to discuss how to proceed.

Petros Clerides yesterday confirmed news reports saying he instructed the police chief in writing on Saturday to launch criminal investigations in collaboration with the state Unit for Combating Money Laundering (MOKAS). This follows a majority decision last week by the three-judge Committee of Inquiry into the causes of Cyprus’ economic crisis that its remit should not include matters that are the subject of court proceedings.

“I think there is no longer any other way but for the police to start an investigation,” Clerides told state broadcaster CyBC.

The three-member committee of inquiry – sworn in about a month after a botched Cyprus bailout for Cyprus in March – was sworn in on a mandate to investigate the political, civil and criminal responsibilities attached to the near-bankruptcy of the economy. They were expected to forward to the attorney-general any findings relating to civil or criminal liability in order for him to decide whether they merited criminal investigation. Last week’s decision changed all that.

But the attorney-general said yesterday that in any case it was the police who were criminal investigators, not the members of the committee. Police spokesman Andreas Angelides said their investigation’s framework was due to be discussed on Thursday. This will include the composition of an investigating team, including what experts they will need to enlist, to investigate “matters that have arisen on the economy”, Angelides said.

The committee’s chairman Georgios Pikis said last week the law did not allow them to prosecute a person based on the findings of the committee. 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”. The move now limits their mandate to investigating solely the political responsibility for the financial debacle. So far, the public hearings have focused on events that took place before a change of government in February.

Former Ombudswoman and inquiry member Iliana Nicolaou disagreed with the decision saying that persons summoned to the hearings had the right to remain silent if they felt that responding to their questions would jeopardise their case in court. She said this did not mean the panel should shy away from posing such questions.

One leading lawyer told the Cyprus Mail on condition of anonymity last week that the decision was “eminently legalistic” but made sense to him given the panel was “toothless in the first place and [did] not want to interfere with court proceedings”.

The closest parallel to an inquiry of this kind in Cyprus is that of the investigation by prominent lawyer Polys Polyviou into the political responsibility behind a devastating naval base blast in Mari in 2011 that killed 13 people and wrecked the island’s biggest power station. One person did reserve his right to silence during Polyviou’s hearings. And although Polyviou’s report was non-binding, he did exceed his task and commented on criminal responsibility. Polyviou also handed over his report to police who launched their own investigations leading to court proceedings against six people, drawing to an end next week.

The committee of inquiry said their decision to leave alone court matters arose from two issues.

One is a lawsuit filed by that administration of Laiki Bank – that is under resolution – against 11 former bank executives including the bank’s former strongman Andreas Vgenopoulos.

The other issue relates to an ongoing criminal investigation into Bank of Cyprus’ acquisition of Uniastrum Bank. Police are looking into whether kickbacks were given to bank executives as part of the deal.

Pikis, the panel’s chairman, said they would limit their probe to the due diligence carried out by the Bank of Cyprus in acquiring Uniastrum and the consequences of the purchase.

Meanwhile, the government spokesman said those responsible for the state of the economy will be punished, adding that the public cared about the essence of the point – that of “attributing responsibility to those guilty for the economic tragedy”.

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