Cyprus Mail
Cyprus

New legal battle for BoC

By Angelos Anastasiou

The Bank of Cyprus is likely to find itself in a new legal battle, as the Legal Service plans to file charges against the lender over the purchase of Greek sovereign bonds by the end of the month, sources cited by the Cyprus News Agency said.

In June 2014, the Bank of Cyprus and several former officials were heavily fined by the Cyprus Securities and Exchange Commission (CySEC) for market abuse and poor corporate governance.

Five of the officials – former board chairmen Theodoros Aristodemou and Andreas Artemis, former CEOs Andreas Eliades and Yiannis Kypris, and former first deputy CEO Yiannis Pehlivanides – as well as the bank are currently on the stand, accused of misleading investors and abusing the market in terms of the bank’s exposure to Greek sovereign risk.

The ongoing trial, as well as the new case to be filed this month, were based on the findings and conclusions of the 2014 CySEC report.

This had focused on the information the Bank of Cyprus – and now-defunct Laiki Bank – had disclosed to the investing public through their financial reports in 2010 and 2011 in terms of the bank’s exposure to Greek government bonds and the risk thereof, as well as their adherence to the Cypriot stock market’s Corporate Governance Code during this period.

According to the CySEC report, although the BoC had acknowledged the risk inherent in Greek government bonds, it subsequently increased its exposure, in violation of its own internal guidelines and oversight codes.

Meanwhile, a similar case against former Laiki Bank officials – former top brass Andreas Vgenopoulos and Efthimios Bouloutas – has stumbled upon their refusal to cooperate with investigators in Athens.

Following acceptance of a request by the Cypriot Justice minister for legal aid to his Greek counterpart, the Greek nationals filed for their exemption from the proceedings two weeks ago.

Their questioning has been suspended pending a ruling by the Greek courts on their request.

According to unnamed sources cited by CNA, the delay in coming to a decision was owed to the Greek elections held last Sunday, meaning a decision is now expected promptly.

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