Cyprus Mail
Business Cyprus

Eliades: we could not have predicted massive Greek haircut

By Poly Pantelides

FORMER Bank of Cyprus (BoC) CEO Andreas Eliades said on Monday reports and claims that he singlehandedly controlled the bank were wrong.

Eliades, who stepped down as BoC CEO in July 2012, soon after the BoC asked the state for a €500 million bailout to meet regulatory capital requirements, said that he never intervened with the bank’s management.

He was testifying at a committee of inquiry looking into how Cyprus’ economy and banking system was almost destroyed. Eliades’ testimony went on for over four hours and was attended by stakeholders and the media, because of his perceived key importance in the bank’s governance.

Eliades was appointed Group CEO in 2005, having risen in the bank’s ranks since his 1980 appointment, taking up the post of country manager in Greece in 1991 when the Bank of Cyprus Greece was set up and becoming group general manager in the BoC Greece in 1998, responsible for expansion there.

Reports, fuelled by testimonies from former BoC brass have either named or suggested Eliades directed the BoC’s substantial investment in Greek government bonds, an investment which went sour in 2011 when the bank lost most of that investment as a result of a eurozone decision to write down Greek sovereign debt.

A former BoC executive for example, Yiannis Kypri, previously told the inquiry that Eliades’ rule was a “monocracy” and that Eliades had raised the lender’s Greek bond portfolio in late 2009 and early 2010 without consulting the board. The yarn that Kypri and other former BoC brass have spun involves Eliades in almost every detail of the bank’s management and its executive decisions.

Key points include claims that even when on December 10, 2009, Kypri had assured a financial news portal that the bank had reduced its exposure to Greek debt, Eliades was issuing orders to repurchase the bonds. A former board member, Evdokimos Xenophontos, even suggested that the BoC was pressured from the Greek government to do so.

“No minister ever indicated to me that I should buy bonds,” Eliades said responding to a question to that effect.

He also claimed that reports he allegedly received €100 million in kickbacks from Greek bond purchases were not true. The committee however, discouraged Eliades from elaborating, citing their decision not to investigate criminal matters.

He also denied claims that he intimated other executives and board members, or that he had been issuing verbal instructions to purchase more Greek government bonds.

“It was not in my culture to issue verbal agreements. I followed the rules, setting an example,” he said.

Eliades denied claims by former BoC board members that they were not kept informed of BoC decisions to buy Greek bonds, claiming that decisions were in fact taken by the relevant BoC committees, and that board members were all kept informed. But he also justified investing in Greek debt, saying that no one could have predicted that they would have to incur such a massive haircut of at least 70 per cent.

“We could not have predicted everything. We were not Gods,” Eliades said.


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