Cyprus Mail
Cyprus

Former Laiki chairman opposed links to Vgenopoulos

Kikis Lazarides

By Stefanos Evripidou

THE FORMER executive chairman of Laiki (Popular) Bank Kikis Lazarides yesterday denied he was at loggerheads with the Hong Kong-based bank HSBC when the latter wanted to take a controlling interest in Laiki in 2005.

Speaking before the committee of inquiry set up to look into the near economic collapse of the banking system, Lazarides denied he was against the continued presence of HSBC in the bank, or its stated intention to increase its share capital.

In 2005, HSBC, which had a 21.6 per cent stake in Laiki, conveyed its intention to raise its interest in Laiki to 51 per cent, a move that would have given it more effective control over the bank’s board.

However, instead of increasing its share capital, HSBC ended up selling all its shares in the Cypriot bank to Marfin Financial Group (MFG) and Tosca Fund.

Shortly after, Marfin increased its share of Laiki until it was able to take control of the bank, and consolidate it with Marfin and Egnatia banks in Greece, re-branding the end product Marfin Popular Bank.

Asked why HSBC relinquished all control of the bank after making it known that it wanted to increase its shareholding, Lazarides said HSBC had decided to buy a very big bank in Turkey called DMIR which was later renamed HSBC.

In July 2006, after the bank had changed ownership, Lazarides resigned as chairman, citing disagreement with the new board’s decision to purchase the Greek banks.

“I reacted strongly to that and said if they intended to proceed, there was no place for me in Laiki Bank,” he said.

He said he warned that such steps would likely lead to the destruction of the banking system and economy of Cyprus.

Asked by the panel whether he was aware of a letter sent by the Central Bank of Cyprus (CBC) to the former vice-chairman of MFG Andreas Vgenopoulos on June 26, 2006, informing the latter that the CBC was investigating unconfirmed reports that MFG and Tosca had pre-arranged to purchase HSBC’s shares in Laiki in violation of relevant laws, Lazarides said it was the first he had heard of it.

Regarding the panel’s observation that HSBC’s shares were allegedly sold before a relevant study on the purchase was even complete, Lazarides said he could not remember.

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