Cyprus Mail

Former co-op officials sued for fraud

By Angelos Anastasiou

THE MANAGEMENT of a cooperative credit institution (CCI) has sued eight former officials for fraudulently funnelling €750,000 from the Cooperative Savings Bank of Bank Employees to inappropriate uses, daily Politis reported on Monday.

A banking meltdown in Cyprus in March 2013 necessitated the recapitalisation of the network of CCIs with €1.5 billion of taxpayer money, and the adoption of a restructuring plan that saw 93 CCIs Cyprus-wide consolidated into a cluster of 18 larger institutions.

New management installed in the new structures appears to have started looking into the workings of previous regimes, and the first outcome was a law suit claiming that the eight individuals – seven of whom had served on the savings bank from 2005 to 2013 – caused the cooperative savings bank cumulative losses of €750,000 through negligent or fraudulent decisions.

Specifically, Politis said, the previous management was deemed responsible for €36,045 in losses arising from the approval of low-interest loans to the savings bank’s staff, €35,310 authorised for the purchase of a luxury car, €433,105 paid out in salary bumps, €165,562 in overtime pay, €27,743 authorised for annual leave, and €65,410 in contributions to provident funds.

In addition to the law suit filed, the savings bank’s new management filed a request to freeze the accused officials’ assets, which the court approved and ordered.

Commenting on the report, the chairman of Cooperative Central Bank’s board of directors Nicolas Hadjiyiannis confirmed its accuracy and said it was only the beginning of a thorough probe into past sins.

“This is a continuance of the policy we had announced a while back – that is, of full transparency and turning a page,” said Hadjiyiannis.

He argued that the development is an indication of the efficiency that has become the cooperative network’s staple.

“The cooperative sector is addressing its past efficiently so that some issues finally come to rest and, if applicable, people are held accountable,” he said.

“At the same time, we continue to look ahead.”

Hadjiyiannis said that it was the duty of the cooperative sector to respond swiftly and efficiently to issues of good governance, and referred to his earlier statement that any cases indicating civil or criminal liability will be seen through.

“Various old cases will not be swept under the rug,” he said.

“Wherever something is identified we will follow the route of civil law suits, and where there is criminal liability the case is, or will be with, the attorney general’s office,” he added.

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