Cyprus Mail

AG’s office neither confirms nor denies probe into co-op boss’s loans

Former head of the Central Co-operative Bank Erotocritos Chlorakiotis

 By George Psyllides

A SENIOR state official neither confirmed nor denied on Monday whether instructions had been given to investigators to look into claims the outgoing head of the Central Co-operative Bank (CCB) had taken millions in loans, which were not being paid.

Daily Politis reported that investigators looking into how the economy was led to collapse have been instructed to also cover the issue of loans apparently secured by Erotocritos Chlorakiotis and his family as well as other similar cases in co-ops.

It was reported last week that Chlorakiotis, his wife and daughters, and a company whose sole shareholder was his wife, received €10.9 million in loans from the Strovolos Co-op several years back, which were not being paid off.

Asked by the Cyprus News Agency, deputy attorney-general Riccos Erotokritou declined to give a direct answer.

“No statements are made about these matters,” he said, adding that anything concerning the committee of inquiry, either directly or indirectly was being assessed.

“In this sense, yes, this matter too is under the investigators’ microscope,” Erotokritou said.

A committee of inquiry is currently looking into the island’s economic debacle but criminal investigators are also probing aspects, which did not fall under the committee’s terms of reference.

“Anything that concerns the committee of inquiry directly or indirectly, the procedure and the documents being submitted, are evaluated by the investigating team with the aim of finding possible criminal offenses,” Erotokritou said.

The rumours regarding the loans to Chlorakiotis and his family had been circling since he announced his decision to retire early in June.

Asked about the matter at the time, the CCB chief said: “I personally feel there is nothing wrong regarding loans possibly taken out by my family,” adding that there had not been any preferential treatment.

Last week however, web-based media outlet Sigmalive published a letter to Chlorakiotis written by former Central Bank of Cyprus governor Athanasios Orphanides on March 8, 2010, in which he speaks of the significant delays in repaying the loans.

Orphanides suggested there was a conflict of interest, since it appeared that the loans kept Chlorakiotis from taking any measures to rectify the large capital deficit the Strovolos Co-op had.

The former CBC governor added that despite the problematic situation, Chlorakiotis and his family managed to restructure their debts, securing a three-year grace period.

Some of the loans matured in 2037, Orphanides said, a period that was far beyond the date of 66-year-old Chlorakiotis’ retirement.



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