Cyprus Mail
Cyprus

Grudging deal at parliament not to probe CBC chief’s actions

By Stefanos Evripidou

THE HOUSE Ethics Committee yesterday “unanimously” agreed- despite murmurs of disagreement- not to request a further probe into allegations that Central Bank (CBC) chief Panicos Demetriades misled parliament over the mandate of an investigation into the circumstances which led the island’s two largest banks to seek state aid.

Following another closed-door session yesterday, committee chairman Demetris Syllouris announced that the matter was officially closed, noting that the decision was unanimous.
As a result, the committee would not be making any further recommendation to the plenum for a full investigation on the matter.

Despite the unanimity, one MP described the whole procedure as a “farce” while another from ruling DISY hinted that the decision did not have his party’s full backing.

The Central Bank boss was alleged to have misled parliament or to have withheld information over the terms of reference of audit firm Alvarez & Marsal (A&M), which appeared to focus more on Bank of Cyprus (BoC) than Laiki Bank.

A&M’s report contained little information on Laiki, which had been bailed out by the state to the tune of €1.8 billion and had been granted some €9.0 billion in emergency liquidity from the EU before the decision to wind it down.

When parliament discovered that A&M had skirted over the goings on at Laiki in the run-up to the economic catastrophe that befell Cyprus, on the orders of Demetriades, MPs were livid, calling for a full-scale investigation into the governor.

Demetriades, who appeared earlier this month before the committee together with his lawyer, denied any misconduct. He argued that Laiki had not been excluded from the probe, but that rather priority had been given to BoC as Laiki had been already nationalised, and authorities needed to see if the same issues existed that could have caused it a similar fate.

Another reason was to avoid jeopardising any court procedures, Demetriades had said. A recent interim court order has frozen around €3.5 billion worth of assets belonging to former Laiki strongman Andreas Vgenopoulos and two other people in a lawsuit against 12 natural and legal persons in Greece and Cyprus.

In yesterday’s unanimously approved conclusions, the ethics committee said the preconditions did not exist as stated by law to recommend a full-scale investigation to the plenum.

However, DISY MP Andreas Kyprianou noted that despite the fact some MPs were satisfied with the governor’s explanations and some were not, discussion of the issue was over.

In an effort to explain the unanimous decision, Kyprianou said the feeling was, given the climate within the committee, that this discussion had to reach an end, after which, each political group could keep having its own views on the matter.

Greens MP Giorgos Perdikis said the decision basically absolved Demetriades of the allegation of misleading parliament, calling the whole procedure “a farce from the outset”.

AKEL MP Aristos Damianou said the matter should never have come before the committee as it does not have the competence to examine the issue.

The deputy of the former ruling party argued that it was time to realise the enemy did not come from within, but from the threats of foreigners and the unacceptable demands of the troika.

Damianou said the country needed to focus on salvaging the gains of society, not get lost in internal intrigues.

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