By Angelos Anastasiou
President Nicos Anastasiades on Friday issued a surprisingly scathing statement lambasting Central Bank governor Chrystalla Georghadji for the alleged removal of wording in her contract pertaining to conflict of interest arising from blood relatives, and accusing her of lying about encounters she claimed to have had with him.
Earlier, an irate Georghadji left a tumultuous House Watchdog committee session after being grilled on potential conflict of interest arising from her daughter’s involvement in representing ex-Laiki Bank strongman Andreas Vgenopoulos in a legal case brought against him by legacy Laiki, which is answerable to the Resolution Authority – headed by the governor of the Central Bank.
Upon her departure, Georghadji said she had arranged a meeting at the Presidential Palace in advance and that she thought the House session would have been concluded by then.
She told deputies that she has been the recipient of threatening letters, but warned that “if some thought that their money entitles them to run Cyprus, that will not be the case with me.”
“When I took over at the helm of the Central Bank, I had been aware of the dangers – but I dared not imagine the extent of the sordidness I was to find,” she said.
But when asked by committee members whether the threats are being issued from within the Central Bank, she sidestepped the question saying she would report everything once she had access to sufficient evidence.
Pressed to reveal details about her contract of employment as governor, Georghadji said her contract resembles those of former governors Christodoulos Christodoulou and Afxentis Afxentiou, but was differentiated to those of more recent governors Panicos Demetriades and Athanasios Orphanides.
“My contract does not include a clause found in Mr. Demetriades’ contract, which prohibited the governor, his or her spouse, or any first-degree relative from employment in any banking, financial, commercial, industrial, agricultural or other business in a way that is in conflict with the duties of the governor,” she said.
According to Georghadji, this clause was not included in her contract as it is not required by law. She noted that President Anastasiades had been informed of the omission in the law.
She said she had been presented with two contracts, but the Central Bank’s legal consultant advised her that her contract should reflect the provisions of the Central Bank law.
She further claimed that when the issue of a potential conflict of interest due to her daughter representing Andreas Vgenopoulos, she had a conversation with Anastasiades who allegedly told her he knew the source of the attacks against her.
Further, Georghadji said that her former husband’s law firm – at which her daughter is employed – took Vgenopoulos on as a client in December 2012, while her daughter started working there in February 2014.
Attorney-general Costas Clerides confirmed that there are no legal issues in the matter, but warned that the governor’s blood relationship with Vgenopoulos’ legal consultant could conceivably influence ongoing legal proceedings.
“In her capacity as governor of the Central Bank, [Georghadji] could influence the case, were she so inclined,” said Clerides. “Having said that, the choice of doing so or not lies with each official’s personal integrity.”
But in any case, he said, the governor’s contract was not reviewed by Legal Services as it was a matter between the two counterparties.
Immediately after leaving the House session, Georghadji was hurriedly summoned to the Presidential Palace, and shortly thereafter, Anastasiades issued an unusually harsh statement refuting her claims of personal conversations with him.
“In order to restore truth, I wish to report the true facts,” Anastasiades’ statement opened.
He recounted instructing the head of the President’s office, as in the case of every new appointment, to prepare the appointment contract.
“On my instructions, the Director of my Office also sent Mrs Georghadji a copy of her two predecessors’ contracts, so she could be made aware of the terms of her appointment,” Anastasiades said.
“Mrs Georghadji returned the contract to the Director of my Office with no mention of removed clauses relating to conflicts of interest due to blood relatives’ employment.”
In addition to this omission, he added, Georghadji had never in any way informed him that her daughter was employed at her ex-husband’s law firm, but “even worse, that said law firm were the legal representatives of Laiki Bank’s former chairman Andreas Vgenopoulos.”
“I am further saddened by Mrs Georghadji’s allegation that, following revelations of her former husband and her daughter with Mr Vgenopoulos, she discussed the matter with me, and that I allegedly told her that I had been aware of the source of the attacks against her,” Anastasiades charged.
“I am obliged to clarify that I will not tolerate anyone using my name, or offer cover to anyone who abuses the trust I have shown them by citing me in order to evade their legal obligations,” he added.
Anastasiades said the only thing he felt he should apologise for is the failure to meticulously check the signed contract for any changes made by the appointee.
“I must reiterate that my earlier commitment for zero tolerance on issues that may be deemed or perceived as a violation of the principles of good administration by anyone also applies to Mrs Chrystalla Georghadji,” Anastasiades said.
Following the President’s statement, DISY, DIKO and the Citizens’ Alliance called for Georghadji’s resignation as the only way to safeguard the credibility of the institution.
AKEL also issued a statement criticising Anastasiades and ruling DISY for their “deafening silence” over the issue, which it claimed to have raised two months ago.
The communist party called for a thorough probe into the matter, in order to reveal the true facts.
AKEL argued that in light of the revelations of a possible conflict of interest, Georghadji “ought to make her decisions.”