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Cyprus

Media ‘misleading public’ in BoC case, says judge

By Staff Reporter

THE Nicosia criminal court hearing the Bank of Cyprus case on Thursday said the media is misinforming the public in its coverage of the ongoing trial.

Presiding judge Lena Demetriadou said the case heard before the court does not relate to the collapse of the economy, “contrary to this impression, which is wrong, being given to the public.

“This is something that should be understood by all. It is a very specific case on a very specific matter. The court is precisely perturbed by the media’s coverage in this misleading way.”

The press ought to properly inform the public, she added.

The judge made the statement following on a ruling on an objection raised by the defendants’ lawyers.

Polis Polyviou, defence attorney for the Bank of Cyprus (BoC), objected to a section of the written statement that was to be read out by the prosecution’s new witness, well-known businessman and BoC shareholder Demetris Lordos.

In the contentious part of the statement, Lordos mentioned that former BoC board chairman Theodoros Aristodemou – one of the defendants in the trial – took out loans from the bank without collateral.

Polyviou raised an objection, motioning for this part of the testimony to not be admitted, as it was immaterial to the substance of the case.

Rather, the lawyer said, the case relates to the bank’s capital shortfall in 2012 and the lender’s omission to inform shareholders.

“It is not the Bank of Cyprus that is on trial here, nor its board members, for poor management broadly speaking, but rather they are on trial for specific criminal offences which are set out in the charge sheet and have everything to do with the alleged capital shortfall and whether the defendants should have disclosed this.

“Whether Mr Aristodemou owed the bank a little or a great deal, whether the loans were backed by collateral or not, and whether since 2010 Mr Lordos was warning about the way the bank leadership was handling matters, is irrelevant to the present case and is of no concern to the court,” argued Polyviou.

As such, the witness’ testimony not only threatened to derail the trial, but also created negative impressions, he added.

The other defence lawyers likewise argued that the defendants are not being charged for creating the bank’ s capital shortfall but rather for their failure to disclose the shortfall.

The prosecution moved to have the objection dismissed. Having heard both sides, the court sustained the objection and ordered the contentious part of Lordos’ statement stricken from the record.

“A witness’ written statement does not afford him the unlimited right to testify whatever he wishes…the court is at a loss to comprehend how these references are linked – even remotely – to the contested issues,” judge Demetriadou said.

Lordos was subsequently allowed to read out the first part of his statement, which primarily related to his attendance of the bank’s annual general meeting (AGM) on June 19, 2012.

The reason he attended, he said, was because it was evident the bank was in trouble “and I wished to learn how the situation was being handled.”

According to Lordos, the speakers at the AGM, while noting the difficult economic climate at the time, “glossed over the state of affairs, assuring [shareholders] that they had taken all steps to deal with the situation and that the bank was in a good position.”

At the same AGM, the bank’s head honchos also claimed that the bank was close to full recapitalisation and said the capital shortfall was at €200m.

The trial continues on January 26.

Five former BoC top officials, as well as the bank itself, are on trial for market manipulation and misleading investors.

According to previous testimony heard in the trial, during meetings held in May and June 2012 between top BoC brass and the Central Bank of Cyprus (CBC), the former spoke of a €200m shortfall, not €400m.

In a letter to then-CBC governor Panicos Demetriades, dated June 20, 2012 – i.e. one day after its AGM – the bank raised its capital needs to approximately €400m.

 

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