Cyprus Mail

AG suspends bond lawsuit

Andreas Vgenopoulos

By Angelos Anastasiou

A private criminal lawsuit against the former Central Bank governor Athanasios Orphanides and former Laiki Bank strongman Andreas Vgenopoulos, among others, regarding a bond issue by the lender was suspended on Thursday on the instruction of Attorney General Costas Clerides.

The case, brought against Orphanides, Vgenopoulos, former CEO Efthimios Bouloutas, three board members, and the bank itself, by a private investor who had been sold bonds – the value of which was later wiped out when the bank failed – was set to be tried on Thursday.

Clerides’ decision does not let the defendants off the hook however, since this particular case will be bundled with several others currently under investigation by the state.

Article 113.2 of the constitution of Cyprus bestows the Attorney General with the power to “institute, conduct, take over and continue or discontinue any proceedings for an offence against any person in the Republic,” and this power may be exercised “at his discretion in the public interest.”

In a letter to the court on Wednesday, Clerides announced his decision to suspend the case, explaining that “this best serves both the public interest and the proper delivery of justice, as this particular case falls under broader cases currently under police investigation.”

The case, the AG added, is expected to be brought before court by the state along with the rest, upon conclusion of investigations.

Holders of bonds from Cyprus’ two major banks, Bank of Cyprus and Laiki Bank (which failed in March 2013), claim to have been defrauded by the lenders when they were being offered the high-yield financial instruments, which subsequently lost their value when the two banks revealed substantial capital shortfalls.

As most bondholders have founded an association to exert political pressure in order to recover their losses, some had decided to sue the principals independently.

However, Clerides’ decision to suspend the case comes shortly after accusations against him by political parties that the prosecution of those responsible for the demise of Laiki Bank is taking too long. Some even implied he may be trying to protect the culprits, an allegation Clerides rejected.

Observers pointed out that a court decision on an individual case could set a precedent and that may affect the state’s case later on.

Orphanides’s lawyer Efstathios Efsthathiou said the Attorney general shouldn’t have allowed the filing of criminal charges by private persons before studying their validity before those affected are subjected to such trouble.

“The right thing is that the attorney general’s office takes knowledge of the indictment in advance, so that cases like the present one are not allowed to unfold,” as a result of which an person with Orphanides’s academic qualifications is traduced in the public and virtually condemned by the media without a trial, Efstathiou said in an emailed statement yesterday.

“The position of the accused, which he expressed from the very beginning, was that the mere reading of the indictment would prove beyond any reasonable doubt that it was a groundless and unsubstantiated case which did not serve justice but instead his humiliation in the eyes of the public,” he said.

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