Cyprus Mail
Business

Grumblings over Hellenic board nomination

Irena Georgiades, ex-public sector reform commissioner

By Elias Hazou

THE NOMINATION to the board of Hellenic Bank of a former civil servant with ties to the ruling party continued to top the political news cycle yesterday.

The row concerns the appointment to the board of Hellenic of Irena Georgiades, ex-public sector reform commissioner and formerly an adviser to the current finance minister.

Pending at the bank is the selection of the board chairperson, at an extraordinary session of the annual general meeting (AGM), with Georgiades strongly tipped for the job.

The new board still has to be approved by the Central Bank.

Hellenic’s shareholders last week approved the appointment of a new board at their AGM; no elections were needed since the number of candidates was equal to the number of positions on the board.

News reports suggested that the three major institutional investors – online gaming company Wargaming.net, New York-based hedge fund Third Point and local investment company Demetra – as well as the church of Cyprus gave their nod of approval.

It’s said that Georgiades was the choice of Wargaming, which some media outlets are reporting as being linked to the finance minister.

Beyond that, questions were still being asked yesterday of Georgiades’ salary at the bank, although allegations about a tripling of the new chairman’s wages have apparently been shown to be inaccurate.

From the outset ruling DISY sought to distance itself from the affair, arguing it had no involvement whatsoever in the selection of the bank’s board, which it said was a private matter.

And in a move that raised eyebrows, DISY also criticised Georgiades’ appointment, on two counts: her reported salary, which the party said was “provocative” under the circumstances; and the fact that Georgiades being a “political personality” raised ethical questions.

It’s been suggested that DISY is seeking to wash its hands of any association with the appointment; another theory has it that the ruling party is unhappy with the fact that powerbrokers inside the government did not consult it.

Meanwhile the political opposition has used Georgiades’ appointment as ammunition in accusing the government of directly meddling in banking affairs.

AKEL MP Irene Charalambidou has addressed a question to the finance minister, asking whether Georgiades’ appointment is in breach of revolving doors legislation.

Under a 2007 law, state officials and certain public servants are prohibited from working in the private sector for a period of two years after they have left the civil service.

As a former adviser to the finance minister, Georgiades may have had access to inside or confidential information pertaining to financial institutions, such as Hellenic Bank’s competitors, Charalambidou said.

Experience shows the law is rarely if ever enforced, one example being Makis Keravnos, current CEO at Hellenic, who moved to the bank just days after finishing a stint as finance minister in 2005.

Amid all this, noises were still being made about Georgiades’ earnings if and when she is confirmed as chairperson of Hellenic.

Speaking to the state broadcaster yesterday, the bank’s former chairman Andreas Panayiotou said his own salary came to €53,000.

Panayiotou said his salary had remained unchanged since 2007, pointing out that any changes to directors’ remuneration must be sanctioned by the bank’s AGM.

His comments countered claims that his successor’s salary has been bumped up to €150,000 as widely reported and repeated.

This was borne out by transcripts of the last AGM, which recommends keeping the remuneration of board directors the same as when they were last revised in 2007.

Thus as it stands the chairman of the board continues to make €55,359 basic salary, the vice-chairman €25,629 and the other members €10,252.

Meanwhile daily Haravghi reports that a group of Hellenic shareholders are considering legal action to thwart Georgiades’ appointment to the board.

According to the paper, lawyers representing shareholders have written to the banking regulator arguing that Georgiades – a chartered accountant – lacks the experience and qualifications for the job. The shareholders warn the Central Bank that should it approve Georgiades’ appointment, they will hold it responsible for deficient regulation and will sue the Central Bank in court.

Georgiades was formerly an aide to her namesake Harris Georgiades when he was MP with DISY; she was subsequently employed as his adviser when he became finance minister last year, and in April of this year she was appointed by the president as public sector reform commissioner, a position she resigned last week.


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