Cyprus Mail

Tales from the coffeeshop: Knives are out over creation of a bad bank

Happy bunnies? BoC's Hassapis and Hourican

THINGS must have been desperate on the news front for Phil to have a banner headline on Wednesday’s front page that said ‘A fillet for the president.’ Was there such a dearth of news on the previous day, even regarding the Cyprob, that the paper led with a story on what the prez had for lunch?

There was no chance this would be a funny lead story because the paper is renowned for its complete lack of a sense of humour – even the supposedly humorous cartoon on its front page is usually dead serious – but the headline made me want to read the story. I wanted to know whether the fillet for the prez was pork, beef or fish.
Reading the sub-heading it became clear that the story was not about what Nik had eaten but about a ‘fillet’ of land that his wife Andri had bought from the Archbishopric. In colloquial Greek, ‘filleto’ – which has the same meaning as the English equivalent – is sometimes used to refer to a piece of premium land.
The report informed us that the plot of land, adjacent to the house of the prez in Limassol, was bought for €500,000. It also revealed all the payment details – there was a €40,000 down-payment, the second payment of €160,000 would be made at the end of this month and the remaining 300 grand would settled through 75 ‘interest-free,’ monthly installments of four grand.
The story had no by-line, even though you would have thought that the hack who came up with the super-scoop would have wanted his or her name on this fillet journalism. Then again the story was not the product of a big investigation, but the result of someone handing over a private sales contract to the paper.

THE PAPER tried to sex up this non-story by presenting it as a dubious transaction, implying that the Archbishop had done a big favour to the first lady, selling her the filleto, supposedly, below its market value.
This was after all, “the aristocratic area of Mesovounia of Yermasoyia municipality,” which the paper reported “is considered one of the most expensive in Cyprus.” It was “littered with super-luxury homes and even from the pictures of Google earth one could see palaces worth millions, with swimming pools and gardens.”
The paper also reported: “According to respected land appraisers, asked by Philelefteros, even today, with real estate market in crisis the value of the specific plot is in the region of €870,000.” The paper did not name any of these respected land appraisers, but Mrs Andri issued a statement saying that the Land Surveys Department had valued the plot at between 477 and 522 thousand euro.
If the writer was not so keen to make a scandal out of the transaction and put his or her common sense to work he or she would have deduced that in Kyproulla of 2014 plots of land do not sell for close to 900 grand, not even in the aristocratic area of Limassol.
And another thing, the crafty, commercially-minded, penny-pinching, Paphite Archbishop of the cash-strapped Church would not sell a plot for 370 grand less than its market value to Jesus Christ let alone to the first lady. And Chrys is shrewd enough to know that the value of a plot is the price a buyer is willing to pay for it and not that put on it by unnamed land appraisers still living in the bubble times.

WHAT IS weird is that Phil ran such a story. No company has financially benefited from Church largesse over the decades as much as Phil. It is currently a business partner/associate of Church-owned Mega TV, so why did it run a story implying Chrys had acted corruptly, when its case was so weak? I am unable to explain the paper’s ingratitude.
The source of the leak may offer a partial explanation. Our mole at the presidential palace informed us that Nik’s security staff established that that sales contract had been leaked by the Bank of Cyprus at which bank confidentiality is not what it used to be.
The prime suspect would have been Chairman Christis Hassapis, who has been known to leak stories about the BoC to Phil, but this story had nothing to do with the bank, NPLs, board meetings or Hourican. It was an attempt to show Nik and Chrys in a negative light.
If it had been Christis he would not have called Prez Nik to apologise and promised that a full investigation would be carried out at the BoC to find the culprit. It should not be a very difficult investigation because only a handful of bank employees had access to the sales contract. Christis did not tell Nik what he would do to the culprit when he is found.

LAST WEEK our establishment had written that the board of the BoC had vetoed the idea of hiring a deputy CEO but we now realise that our information was wrong. Phil, often briefed by the happy bunny chairman, reported on Monday that the board had decided at its meeting on April 4 to hire a deputy CEO who would be Cypriot to deal with retail banking.
On Tuesday the board committee was to have decided which firm would carry out the recruitment. However by Thursday, Phil reported on Friday, interest for the position had been expressed by bankers from the competition and the board hoped to appoint someone before Easter (this weekend). In the space of a few days the board would vet applicants, short-list candidates, interview them, agree terms and make an appointment.
Firms have been known to take longer hiring a shop assistant or office cleaner than the board of the BoC would need to appoint a deputy CEO. The Cypriot deputy CEO had probably been found before the board decided to look for someone so that an Easter bunny appointment could be made.

AS MENTIONED last week, there is a rift at the bank between the happy bunny and Irish CEO John Hourican who has been repeatedly undermined in the media by unnamed but not unknown sources.
Hassapis was shaken when he read that Hourican would consider the setting up of a bad bank in order to transfer all the BoC’s toxic assets, including the NPLs of the big developers and hoteliers. A board member that was not named told Phil that there was no such plan.
The speculation is that Hassapis wants to appoint a deputy CEO in order to control Hourican who is not prepared to do any favours to the big developers and hoteliers with the big NPLs. And it would not be a surprise if the new appointee is given responsibility for dealing with the NPLs as he would be more inclined to go easy on businessmen not repaying their loans.
But Hassapis is unlikely to have a free ride because the presidential palace is not opposed to the creation of a bad bank. In an interview with Tass news agency on Friday, finance minister Haris Georgiades said the government did not object to the creation of one or more bad banks, stressing that any decision should be based on business criteria.
The decision, he said should not be determined by “political intervention or, worse still, intervention by third parties, that could be affected and hope to safeguard their own narrow interest at the expense of the interest of the rest of the population.”

THE KNIVES are out with the Prez backing Hourican, who has the support of the Russian members of the board and the DISY leadership, which had vehemently opposed the creation of a bad bank when it was mentioned by Professor Panicos last summer, backing Hassapis.
In fact Hassapis has been acting so autocratically as chairman, interfering in the day-to-day running of the bank, because he enjoyed the full backing of the DISY leadership and the employees union ETYK. A guy appointed chairman from nowhere, with no track record or management experience would not have been so arrogant if he did not have political backing. He would not feel so confident to sneakily undermine the CEO less than six months after he was appointed because the guy is doing his best to recover the hundreds of millions the bank had lent to big developers and hoteliers. But strangely, on Friday, even the DISY leader Averof Neophytou publicly declared he did not oppose the creation of a bad bank. Christis would not be a very happy bunny, nor such an arrogant one, if he cannot rely on the backing of the DISY leadership.

FORMER finance minister Vasos Shiarly, who is now jobless, has stumbled on a nice little earner. He is now acting as the ‘loan advisor’ of one of the big developers with big NPLs at the BoC – Michael Leptos.
Shiarly, who was a senior executive at the BoC before becoming a Tof minister, accompanies Leptos when he goes to the bank to discuss what should be done about his group’s NPLs worth several hundred million.
How funny that the guy who was mindlessly granting loans to the Leptos group, even when it was unable to repay its existing loans, is now acting as the consultant of the group and haggling about the loans he granted with the bank on the borrower’s behalf. It just seems wrong.

THERE were plenty of dry eyes at the Central Bank on Thursday as Professor Panicos bade farewell to his staff. In his speech he praised his inner circle and himself for all the wonderful things they did for the country. The 47.5 per cent haircut of the depositors of the BoC, for which he had come under strong criticism, he said would “prove life-saving.”
He also helped save the euro. “Through my participation in the governing council of the ECB, I contributed, together with my counterparts, towards the taking of significant decisions that proved of crucial importance for the saving of the euro.”
But his biggest achievement was warning the ECB against using the term Monetary Outright Transactions, because the acronym would be MOT. After he explained that this stood for Ministry of Transport in the UK, associated with car inspections, his counterparts decided to change the term to Outright Monetary Transactions.
Thanks to Panicos’ intervention, there is now no danger of people getting the programme for defending the euro mixed up with the MOT test.

I FELT like reaching for the sick bag when I heard Prez Nik’s disgraceful flattering of the public parasites at PASYDY’s 51st annual conference on Friday. Referring to the difficult last 12 months he said that “we all paid a very high price, but more than anyone you, the workers of the public sector.” He even thanked the parasites “for your total co-operation in the difficult decisions we had to take” and expressed his appreciation for their “responsible stance.” Words fail me.

OUR DEPUTIES’ tireless, but ultimately unsuccessful efforts to pass the bill protecting primary residences from foreclosure had one positive effect. Their proposed bill helped boost the NPLs of co-op banks. Apparently, in the last couple of months, many people who had been promptly paying their monthly installments on their housing loans just stopped doing so. It just goes to show that if the bill was passed, 90 per cent of people with house loans would have applied to the courts for suspension of repayments.

JOURNALISTS never tire of telling us that people are totally disillusioned with politics and that politicians had fallen into disrepute. An opinion poll conducted on behalf of the CyBC last week was cited as proof of this. According to the poll, 35 per cent of the population would not be voting in the next month’s European elections.
Eighty-five per cent of these people would not vote for the following reason: “I am disappointed with the parties and the politicians.” Are they disappointed because the politicians are a bunch of corrupt, self-serving, ignorant liars, as journalists and TV pundits have been claiming?
I have a different theory. They are disappointed with the parties and politicians, because they are no longer in a position to offer rusfeti – there are no new public jobs to distribute, no promotions in the public sector to arrange, and cash to give as handouts to refugees, single mothers and other deserving voters.

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