Cyprus Mail

Bank of Cyprus probe at ‘critical juncture’

By Elias Hazou
A POLICE probe into Bank of Cyprus’ acquisition of Russian lender Uniastrum and its purchase of stock in Romania’s Banca Transilvania is at a “crucial juncture,” the deputy attorney-general told MPs Tuesday.
During a briefing at the House Institutions Committee, Ricos Erotocritou said that, in addition to collecting data, police investigators have already begun taking depositions from people.
He went on to reveal that Romanian authorities have requested assistance from Cyprus in their own investigations into Bank of Cyprus’ acquisition of a 9.7 per cent stake in Banca Transilvania for €58m back in 2009.
In the summer of 2010 DIICOT, the Romanian body that investigates organised crime and terrorism, charged the head of Banca Transilvania’s administration council, Horia Ciorcila, and the head of Bank of Cyprus (Romania), Georgios Christoforou, with insider trading and money laundering in the transaction.
DIICOT also charged a former vice-president of the administration council or Banca Transilvania, Claudiu Silaghi, and Bank of Cyprus employees Anastasios Isaakidis, along with four other individuals. Bank of Cyprus (Romania) denied any wrongdoing. The Bucharest Tribunal acquitted Ciorcila and Christoforou in July 2011, as did the Bucharest Court of Appeal in June 2012.
However, new evidence has apparently come to light on the same case, and Romanian law enforcement officials have asked Cypriot authorities for assistance. The request was granted, and Romanian officials will be arriving here later this week.
Cypriot detectives are also looking into the BoC’s purchase of 80 per cent of Russian lender Uniastrum for around €400m.
A findings report on the transaction 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.
Erotocritou said allegations of mass deletion of data from desktop computers at BoC are a “major focus” of ongoing investigations. Experts from the private sector could be brought in to assist police computer specialists, he said.
A report, also by A&M, leaked earlier this year found that the information provided by the bank was incomplete and data deleting software was found on the computers of two senior executives.
The report said there were “significant gaps in the email data received from BoC for the period 2007 to 2010, a key period for our scope of investigation.”
A&M were looking into how BoC accumulated €2.4bn worth of Greek government bonds, later suffering huge losses because of that.
Responding to an MP’s query concerning allegations that former central banker Athanasios Orphanides took with him hard drives from his office computer on leaving his post, Erotocritou said police would be investigating anything to do with suspected removal or deletion of data.

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