Cyprus Mail
Cyprus

‘Nothing untoward in Uniastrum deal’

Former Bank of Cyprus CEO, Andreas Eliades

By Elias Hazou

FORMER Bank of Cyprus CEO Andreas Eliades yesterday dismissed rumours of corporate malfeasance in relation to the bank’s 2008 acquisition of Russian lender Uniastrum.

At a session of the House Institutions Committee looking into the balance sheets of Cypriot commercial banks over the last three years, the former BoC strongman said that talk of some €50m given in kickbacks to grease the deal was unfounded.

The Cypriot bank had paid around €400m to obtain an 80 per cent interest in Uniastrum. The transaction came in the wake of the demise of Lehman Brothers that marked the beginning of the global financial crisis.

Responding to a question put to him by the deputy Attorney-general, Eliades said BoC had got permission from the Central Bank before proceeding with the acquisition of Uniastrum.

The deal involved increasing the Russian bank’s share capital by €50m. Eliades said €40m came from the BoC and the remaining €10m was put up by Russian investors.

The former CEO insisted the transaction was above board, and stressed that Uniastrum had a healthy leverage ratio when it was purchased.

The acquisition of Uniastrum is part of a broad criminal probe here into the near-collapse of the financial sector. The police investigation spans the years 2006 to 2013.

A findings report on the acquisition compiled earlier this year by financial forensic experts Alvarez and Marsal found no evidence of corruption.

A&M said the Cypriot bank went ahead with the purchase despite misgivings in due diligence reports and a legal opinion that judged it could opt-out of the deal or renegotiate the acquisition price.

But reports this week in the local media claim that investigators have in fact traced evidence of bribes and are zeroing in on the beneficiaries.

Politis said the €50m earmarked for the expansion of Uniastrum’s share capital went to Moscow but were then siphoned to Belize, ending up in the accounts of five companies registered in the Caribbean tax haven.

The daily said the cash wound up in the pockets of three Cypriots and two Russian nationals, each receiving €10m.

The paper promised to publish names and bank accounts once it had cross-referenced its information.

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