Former Central Bank of Cyprus (CBC) governor Christodoulos Christodoulou and several other defendants face 29 charges in connection with a €1m transfer allegedly paid to the supervisory authority chief to turn the blind eye while Greek financier Andreas Vgenopoulos acquired a controlling stake into Laiki Bank, which failed in 2013, reports said on Wednesday.
Christodoulou, Vgenopoulos and five other individuals and three companies have been implicated in the affair. Details of the charge sheet were published in the press on Wednesday. The case is expected to be referred to the Nicosia criminal court at the end of September.
Christodoulou admitted to receiving the money, which was paid by Focus Maritime Corporation to a company technically registered to his daughter and former son-in-law, and claimed it was an advance payment for consultancy services over 10 years.
He pleaded guilty to tax evasion charges in October 2014 and was jailed for five months.
Focus, owned by Greek ship-owner Michalis Zolotas, reportedly received hundreds of millions in loans from Laiki Bank during Vgenopoulos’ reign at the lender.
Prosecutors suggest that Focus acted as a front for Vgenopoulos, who bribed Christodoulou to look the other way while the former irregularly acquired a controlling stake in Laiki in 2006.
The Greek businessman denied any personal acquaintance or association with Zolotas, other than as a customer of the bank.
The former governor’s daughter and her ex-husband, Athina Christodoulou and Andreas Kizourides, Zolotas, and former Laiki officials Kyriacos Magiras and Michalis Fole, have also been indicted.
Three companies – AC Christodoulou Consultants, Focus Maritime Corp, and Vgenopoulos’ investment firm Marfin Investment Group (MIG) are also included on the charge sheet.
The case is based on the first charge, according to which between February and November 2006, while holding the post of CBC governor, Christodoulou agreed to take €1mln from Vgenopoulos and MIG “in a manner that suggested corruption”, as a reward for him to turn the blind eye to actions that were within his remit.
Christodoulou is accused of omitting to investigate whether MIG could control Laiki Bank with the acquisition of 9.98 per cent of shares from Marfin Financial Group, and 8.18 per cent from TOSCA investment fund on February 6, 2006, without the approval of the CBC.
Included in the charges is the employment of Christodoulou’s former son-in-law by Vgenopoulos in 2007. The high-ranking position, according to the charge, constitutes a reward for Christodoulou.
Christodoulou also faces two counts of abuse of authority while all defendants will have to answer money laundering charges.