In a pre-trial ruling, the Paphos district court on Thursday cleared of all charges two former prominent financiers of now-defunct Laiki Bank.
Andreas Vgenopoulos and Efthimios Bouloutas were facing charges related to mis-selling Laiki bonds in a private criminal case brought against them by a Paphos investor.
In its judgment, the court said the case as filed could not proceed due to multiplicity – more than one offence is now being alleged for all three charges on which the defendants would have stood trial.
This affects the defendants’ right to a fair trial, the court said, adding that the situation could not be remedied by merely amending the charge sheet.
Multiplicity is a legal principle that bars charging one offense in several counts. A multiplicitous indictment creates the risk that a defendant will be punished for more crimes than he actually committed.
As such the court ordered the charges against Vgenopoulos and Bouloutas dropped, and additionally cancelled the arrest warrants against the two.
The defendants, who reside in Greece, never showed up in the court room since the case began.
The plaintiff is considering his next move, including appealing the court’s decision with the Supreme Court.
A number of bondholders in the island’s major banks claim they were duped into investing high-yield bonds without being informed of the risks, and some have sued the banks because they were allegedly not properly informed of the risks.
Laiki stopped paying interest on the bonds after incurring losses from a Greek sovereign debt write-down in 2011. In some cases the bonds offered an attractive return of 7.0 per cent.
The total amount placed in securities across Cyprus’ banks is said to be about €1.4bn.
In March 2013 Laiki was shut down as part of the terms of a government bailout by international lenders.