Cyprus Mail
Business

Day of police questioning for former BoC CEO

Former Bank of Cyprus CEO, Andreas Eliades

By Constantinos Psillides

FORMER Bank of Cyprus CEO Andreas Eliades was questioned on Monday by police investigators regarding his role in the financial meltdown, according to a police source.

The source, who wished to remain anonymous, told the Cyprus Mail that the questioning lasted for around nine hours and that the former Bank of Cyprus (BoC) boss was fully cooperating. “The questioning started around noon and was expected to be concluded at around 9.00pm. If we are not done will pick where we left on Tuesday,” said the source.

Eliades is being investigated for allegedly deliberately withholding information or otherwise misleading investors with regard to BoC’s investments in toxic Greek government bonds while being privy to confidential information.

Cypriot banks lost about €4.5b when European Union leaders agreed in late 2011 to a Greek debt write-down, designed to make that country’s debt burden more sustainable.

A Securities and Exchange Commission (CySEC) June report found that Eliades was amongst the bank executives to blame for the Greek bond blunder. Eliades was slapped with a €530,000 fine, along with other former high ranking executives from the Bank of Cyprus and the now defunct Laiki Bank.

The police source told the Cyprus Mail that investigators are putting together a detailed report to be handed over to the attorney-general’s office as soon as possible.

Police were under heavy criticism over the financial crisis probe, as Attorney General Costas Clerides shifted the blame to them when reports surfaced saying that the state was dragging its feet.

The scope of the police inquiry covers the expansion into Greece, banks’ corporate governance, Cypriot banks’ purchase of junk Greek bonds, and how the former Laiki Bank came to amass some €9b in emergency liquidity, a liability since passed onto the Bank of Cyprus.

Authorities were forced to seize uninsured deposits at its two main banks in March 2013 to qualify for €10b in aid from international lenders, the first time bank savers were burned in the euro zone crisis.

Problems on Cyprus snowballed into the winding-down of Laiki Bank under a mountain of debt and a large chunk of deposits exceeding €100,000 being converted to equity to prop up Bank of Cyprus.

 

 


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