Cyprus Mail
OpinionTales from the Coffeeshop

Tales from the Coffeeshop: The forgetfulness of those who brought banking to the brink of partition

BoC former boss Andreas Elaides

By Patroclos

AS IF IT were not bad enough that our country was partitioned, now we have to face the prospect of our biggest bank suffering the same tragic fate. Plans are afoot to partition our dear Bank of Cyprus, even though the brains behind the move have avoided use of the ‘P’ word, talking instead about a ‘splitting in two’.

There will be a B of C dealing with banking operations and a B of C asset management company that will be selling off the real estate of developers and other businesses that are unable to repay their loans. Thankfully, the partition will not lead to the creation of a pseudo-bank, but to two internationally recognised banks that will respect all uninsured depositors’ human right to be screwed by them.

However, we will be faced with the dilemma, eloquently posed by the sensitive poetess about Kyproulla’s division – which of the two banks we should love. To paraphrase the poem, ‘Our bank has been split into two, which part, must we now love? The lender which charges 8 per cent interest or the asset manager that will sell our property for peanuts?’
Many patriots, terrified of bequeathing their children another division, have launched an unyielding struggle to preserve the BoC as one entity, with a single international personality, single sovereignty, single board of directors (without rotating chairmanship), one balance sheet, one set of audited accounts and banking integrity.

It would be catastrophic if after unification with Laiki and generously housing all Laiki’s refugees, the BoC is partitioned and the asset company acts like an occupation force, heartlessly seizing and selling off properties of developers and the other nouveau-poor of post-bail in Kyproulla.

THE MAN who like a modern-day coupist laid the foundations for the partition of poor old BoC, former CEO Andreas Eliades, did exactly what our establishment had predicted he would do when he appeared before the geriatric investigative committee last Monday.

Patroclos proved his prophetic powers by writing last week that Eliades “will want to clear his name and explain that the collapse of the bank had nothing to do with him,” which was exactly what he did in a commendable performance that the king of personal innocence, comrade Tof, would have been proud of.

Wearing a grey suit, grey tie and grey face, with aggressive lawyer in tow, Eliades blamed his major cock-ups (Uniastrum, purchase of Greek bonds) on others, claimed not to remember critical matters, and kept bringing up the name of our friend Charilaos Stavrakis, who had left the bank at the beginning of 2008 and could not have had any responsibility for the reckless decisions that led to its collapse.

The irony was that even when Stavrakis was working at the bank, as part of a three-member senior management team, all the big decisions were being taken by the dictatorial Eliades, who had even sent a letter (presented by the investigative committee) to the other two when they complained about the situation to the board telling them that he had complete responsibility for the running of the bank.

The truth is that Eliades, who said he could not remember sending such a letter, had always run the bank like a dictator. One director had memorably quipped that the former CEO had replaced corporate governance with autocratic governance.

PERHAPS he could not remember how dictatorially he behaved because he claimed at the committee that everyone was entitled to disagree and express his opinion and he denied charges that he always imposed his diktats. “I never pressured anyone and I never shouted at anyone,” he said.

He obviously forgot – he would not have lied under oath – he regularly shouted at senior managers and members of the board, bullying them and humiliating them into submission. But he did not forget that in the years that Charilaos was still at the bank bonuses were paid. Why he kept mentioning poor old Charilaos, whom you could blame for many things but not the collapse of the BoC, will remain a big mystery. Eliades was after all collecting super-bonuses after Charilaos left the bank, in 2008 and 2009.

He even tried to blame Charilaos for the purchase of the grossly overpriced Russian Bank Uniastrum, which BoC now cannot sell at a fifth of the price it paid in 2008, claiming our friend had not objected to the deal when he was at the bank.
Our friend, as finance minister, tried to stop the sale, believing it was too risky – he had a meeting with the Governor in an attempt to stop it – another fact Eliades conveniently forgot about, stating: “Stavrakis never took a stand against the purchase.”

So if Stavrakis was not against the purchase of a struggling Russian bank (downgraded by Moody’s) the investment was justified.

THE FORGETFUL former CEO, surpassed himself when telling the committee about the purchase of the €2b worth of Greek government bonds at the end of 2009 and start of 2010. He had nothing to do with this and it was a lie he had given instructions for the purchase of 400,000 bonds in December 2009.

The purchase of bonds was not his responsibility he claimed. Others in the bank took decisions to spend €2b without the CEO’s authorisation. And these same people who were spending the bank’s billions on Greek junk bonds hid from their CEO a letter from the Central Bank warning of the risks of the investment. The letter was not shown to Eliades, who claimed he first saw it two years after it had been received.

We all expected that a former commando, who fought in 1974, would have had the balls to stand up in front of the committee and take full responsibility for the BoC fiasco like a man instead of blaming his minions and Charialos. He was after all the highly-paid, autocratic CEO, in total charge of the bank in the period that led to the collapse, unless he forgot about that as well.

WE HAD been waiting for the Cyprob to come up at the investigative committee for the economy at some point and it happened on Thursday when Michalis Sarris, finance minister during the Eurogroup meetings, appeared before it.
Sarris described the merciless hostility of our partners during these meetings, saying that nobody offered support to hapless Kyproulla. He believed that some of our partners wanted to destroy the island as a financial centre.

This prompted the chairman of the committee Giorgos Pikis to ask whether our delegation had cited our victimhood to soften the attitude of our partners. Pikis repeatedly asked if the Eurogroup had been informed that Cyprus had been the victim of an invasion and ethnic cleansing and that a big part of its territory was occupied since 1974.

Was Pikis suggesting that we made the Europeans feel sorry for us by marketing our victimhood? Perhaps our delegation should have included a couple of the poor old ladies in black – holding photos of their missing relatives – that our cynical political parties use as the mascots of their invasion anniversary gatherings.

Sarris explained that the Europeans were not concerned with the invasion when discussing economic issues. It did not occur to Pikis that it would have been a bit difficult to sell tales of our victimhood to the Krauts, given the size of our houses and the number of Beemers and Mercs on our streets.

THE TROIKANS met the leadership of the co-op movement last week to decide the restructuring of the co-ops that will need between one and 1.5 billion euro for their re-capitalisation. What was interesting was that the incompetents who brought the co-ops to the brink of bankruptcy are still in charge and negotiating the re-structuring with the Troika.

Ahead of the meeting, the Akelite former football coach Andreas Mouskallis, who is president of the Pancyprian Confederation of Co-ops, declared that reducing the number of co-ops to less than 18 would mean “the movement would not be able to survive with its people-centric ideology.” This ‘people-centric ideology’ will cost the taxpayer €1.5 billion, which makes it a pretty bad business model that must not survive.

It is this same people-centric ideology that inspired co-op bosses to come up with the most colossally wasteful early retirement scheme in the history of Kyproulla. They propose to pay co-op workers as much as 41 salaries as compensation for taking early retirement. Three-and-a-half years’ worth of salaries for employees that had another 15 years of service before retirement, paid by a bankrupt movement, that would be bailed out by the taxpayer is a people-centric scam.

I hope the troika will protect the interests of the taxpayer by vetoing the redundancy scheme of the self-serving co-op bosses.

THE CO-OP workers make the bank employees union Etyk seem sensible and restrained by comparison. A bank employee with the same years of service as a co-op worker (15 years) would only receive 15 months’ salaries as part of the early retirement scheme, after Etyk secured another two months’ compensation from the spineless BoC board.

Now bank employees will receive seven months plus a month for every two years of service, which is a pretty good compensation package, when you consider Laiki’s 2,500 workers could have been made redundant with two months’ salary as compensation when the bank closed down. But some bright spark decided it was more socially just to steal a few more millions from the BoC depositors and distribute it among Laiki’s workers.

MORE ‘proof’ was presented by our West-hating politicians and journalists to support their view that Nato and the evil Yanks were behind the Turkish invasion. A document on Nato headed paper was presented by a leading CyBC hack who was convinced of its authenticity.
Labelled ‘TOP SECRET’, this was a memo allegedly written by the Nato General Secretary in 1974, Joseph Luns, to the US Secretary of Defence (no name given). It said:
“The Assistant Undersecretary of State Sisco’s visit to the Alliance, showed the decision of the American government to finish the Cyprus problem.
“We agreed with Mr Sisco for supporting the Turkish army during the landing, as well as, in the violent expulsion of Makarios.”

I am no expert on documents, but it is impossible to believe that the Nato chief would communicate in such terribly bad English, in a top secret message in which accurate and correct use of language is of paramount importance. But where did the CyBC’s intrepid reporter find this joke document?

I suspect he was a victim of a photo-shop hoax, because the Turk-loving Nato boss would never have credited the Turkish army with the ‘violent expulsion of Makarios’. Then again anything was possible when ‘the decision of the American government (was) to finish the Cyprus problem,’ as if it were a plate of chips.

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