Cyprus Mail

A number of individuals, companies contributed to economic collapse AG says

A number of individuals, companies, and organisations contributed to the collapse of the banking system and the economy, the attorney-general said on Tuesday, as an ongoing probe is looking into whether certain actions constituted criminal offenses.

The investigation, launched in July this year, goes as far back as 2006, when HSBC sold its stake in the now defunct Laiki Bank.

The investigation has “uncovered a complex network of companies, parent companies, subsidiaries, and affiliates, used to acquire stakes in banks,” Costas Clerides said in a written statement.

The probe was also looking into the serious liquidity problems faced by banks and the possibility of using emergency liquidity and debt instruments to cover obligations and other gaps.

“The Legal Service reaffirms its determination to carry out a full and thorough investigation into all the aspects … and proceed with the necessary actions when justified by the evidence,” the attorney-general said.

The probe, Clerides said, was not expected to finish any time soon.

Cyprus agreed to a €10 billion aid package from the International Monetary Fund and the European Union in March after its two major banks were all but decimated by their heavy exposure to debt-crippled Greece.

The island was forced to shut down Laiki and raid deposits to recapitalise Bank of Cyprus — the first time in the history of the eurozone’s debt crisis.

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