Cyprus Mail

BoC’s Uniastrum takeover was a ‘huge scandal’, MPs say

By Angelos Anastasiou

The need to investigate the events leading up to the ill-advised takeover of Uniastrum Bank by the Bank of Cyprus in 2008, with a view to bringing those responsible to justice and punishing those found guilty, was the consensus of discussion at the House Ethics committee on Tuesday.

Committee chairman Nicos Nicolaides deemed the investment, which the BoC was only able to disentangle itself from on Monday after selling its majority stake in the Russian bank for €7 million, a “huge scandal”, and said the Ethics committee’s probe will not interfere with other investigations.

“I don’t think such flagrant violation of the rules of ethics and good governance, as in the case of Uniastrum, has precedent,” he said.

“The Ethics committee, within the parameters of its role and with no intention or right to obstruct any other ongoing probe, plans to fully investigate the Uniastrum affair.”

Nicolaides was responding to concerns voiced by Attorney-general Costas Clerides, who cited the Legal Service’s ongoing criminal investigation into the matter in declining to attend the committee’s session.

Selling the Uniastrum investment has been part of the strategy of the BoC’s new management, the lender’s director of corporate affairs Michalis Persianis told lawmakers.

He added that if the committee wished to invite the people involved in making the decision to buy Uniastrum, it would have to speak with people who are no longer with the Bank of Cyprus.

According to Persianis, the sale of Uniastrum was an obligation and a promise by the bank, with positive impact on its capital buffers, which now stand at 15.2 per cent.

“It was an investment we didn’t want – it didn’t serve the bank’s interests,” he told the committee.

The spokesman said clearing up the questions surrounding the purchase of the Russian bank as soon and comprehensively as possible is also the BoC’s desire, so that the bank can leave the affair behind.

The “new Bank of Cyprus”, he said, in its new shareholding structure, comprising depositors who saw their funds converted into equity and investors who supported the bank during last year’s stress-tests, has more reason than anyone to see those guilty punished.

“The questions posed at parliament are of interest to the Bank, as well, since it wants to do away with the burdens of the past,” Persianis said.

“At the end of the day, the fireman shouldn’t be held responsible for the fire.”

Cyprus Securities and Exchange Commission (CySEC) chairwoman Demetra Kalogirou said the commission conducted a probe to establish whether investors were properly informed of the bank’s value, which it forwarded to the Legal Service in 2014.

According to Kalogirou, the Attorney-general informed the commission in August 2015 that the issue may warrant criminal investigation.

Central Bank executive board member Yiorgos Syrichas said that, in investigating the buying of Uniastrum, the committee will need to invite the people who handled the matter at the time.

He noted that, with regard to the prospect of buying the bank, both positive and negative elements had been recorded, while some of the positives, including the growth of the Russian economy or cheap credit in Russia, were static analysis with no predictive merit.

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