Cyprus Mail
Cyprus

Lawsuits against CySEC chief by ex-Laiki duo suspended

Former Laiki strongman Andreas Vgenopoulos

By Angelos Anastasiou

ATTORNEY-General Costas Clerides has suspended the criminal law suits filed by former Laiki Bank strongmen Andreas Vgenopoulos and Efthimios Bouloutas against members of the Cyprus Securities and Exchange Commission (CySEC), including chairwoman Demetra Kalogirou, local daily Politis reported yesterday.

According to the paper, Clerides exercised his right – per article 113.2 of the Cyprus constitution – as Attorney-general to “discontinue any proceedings for an offence against any person in the Republic, at his discretion in the public interest”, as he had done last week with a private case against the two plaintiffs.

Citing “well-informed sources from Legal Services”, Politis reported that after reviewing the lawsuits, Clerides ruled they could not be allowed to proceed, both for reasons of public interest, and because the filing of criminal cases against former Laiki Bank officials – following the filing of such charges against five former Bank of Cyprus officials last December – remains pending.

In all, Vgenopoulos and Bouloutas filed six criminal lawsuits – three against Kalogirou and another three against the rest of the CySEC members.

The Greek entrepreneurs accuse CySEC, singling out Kalogirou as chairwoman, of having exhibited professional negligence in monitoring stock market manipulation by the administrations that followed their own at Laiki, after their ousting.

The paper interpreted the duo’s lawsuits as a reaction to heavy fines imposed by CySEC to them, among others, last June – an unprecedented €705,000 each – for improper disclosure of the bank’s holdings in Greek bonds before they were written down or ‘haircut’ in 2011.

But in correspondence between Vgenopoulos and Kalogirou in October 2014, the Greek banker alluded to the blame he laid on the CySEC chairwoman for her failure to investigate public remarks attributed to Michalis Sarris, appointed by the government as non-executive chairman of Laiki from January to August 2012.

Vgenopoulos alleged that in early 2012, Sarris was talking up the prospect of foreign investors – including the Russian VTB Group – pouring money into under-capitalised Laiki, while after his stint was over later in the year, he admitted to media outlets that there had never been any realistic hope of finding investors, and that the bank was “doomed”.

This, Vgenopoulos argued, constituted misleading investors, and as such should have initiated a probe by the CySEC.

“You were obligated to monitor the market and ensure its smooth operation, while the events I have reported to you repeatedly, verbally during the second half of 2012 and in writing on October 3, 2013, occurred under your watch”, Vgenopoulos wrote to Kalogirou.

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