Cyprus Mail

Georghadji had conflict of interest says House committee

By George Psyllides

The House Ethics Committee has unanimously concluded that Central Bank Governor Chrystalla Georghadji has a conflict of interest and also blamed the Presidency for the manner in which it had handled the case.

The committee finalised its report into the affair on Tuesday.

Georghadji is under the spotlight over the fact that her daughter worked for her estranged husband’s law firm, which represented former Laiki Bank strongman Andreas Vgenopoulos, whom the lender’s former Special Administrator took to court over his alleged role in the bank’s failure in March 2013.

The employment of Georghadji’s daughter at the law firm was seen as a serious conflict of interest for the governor, who also chairs the Resolution Authority – comprising the Central Bank’s board of directors.
She was also censured over her employment contract, which she amended to insert less-stringent conflict-of-interest restrictions.

The CBC chief claimed that she had attached notes to the contract, informing the President of both amendments. The Presidential Palace said the notes were never found.

Committee chairman Nicos Nicolaides said because of her relation with the law office representing Vgenopoulos, the governor should not have accepted the appointment in the first place.

“There is also responsibility in the intentional amendment of her contract, apparently aiming to remove a provision that concerned the employment of a first-degree relative as an impediment to the appointment,” Nicolaides said.

In the aftermath of the political row over Georghadji’s conflict, Andreas Yiorkadjis announced his firm had dropped Vgenopoulos as a client, and that Marianna Georghadji no longer worked for her father.

The report also assigns blame on the Presidency for delays in investigating the affair from the moment it emerged late last year. The Presidency is also responsible for the manner the contract had been handled.

Internal process failures resulted in an embarrassing witch-hunt, which hanged then-presidential aide Makarios Droushiotis – who had received the signed documents from Georghadji and forwarded them for the President’s signature – out to dry.

A third “pillar” of the conclusions relates to any negative impact the events under scrutiny may have had on the investigations and legal proceedings relating to the banking scandal – meaning the economic meltdown of March 2013 – according to committee chairman Nicos Nicolaides.

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