By Stelios Orphanides
The Cyprus Securities and Exchange Commission said that it had fined Bank of Cyprus €25,000 and eight other board members and executives a total of €420,000 for misrepresenting the goodwill value of the lender’s Russian loss making unit Uniastrum in 2012.
CySEC, as the commission is widely known, fined general manager Christis Hadjimitsis and directors Andreas Artemi, Yiannis Kypri and Yiannis Pechlivanides each €70,000 and their colleague Stavros Constantinides €50,000, it said in an emailed statement on Monday. Directors Costas Severis, Georgios Georgiades and Irini Caramanou got a €30,000 fine each.
The investigation of this case related to the goodwill of Uniastrum in Bank of Cyprus’s financial statements “was time consuming and complicated as CySEC had to collect and analyse a lot of evidence and data,” CySEC chairwoman Demetra Kalogerou was quoted as saying.
The evidence presented to CySEC showed that the law had been violated which prompted the commission to fine the men and also impose a “symbolic fine” on Cyprus’s largest lender, Kalogerou continued.
“The CySEC board took into account that a probable imposition of a severe administrative fine would as a result of the given circumstances burden the bank’s new shareholders who emerged from its recapitalisation,” CySEC said. “We consider the completion of this investigation as very important with respect to the target of achieving complete transparency with respect to the unpleasant events that took place in the Cypriot banking system in 2013”.
The Bank of Cyprus, which was recapitalised in 2013 with depositor money, sold Uniastrum for consideration of €7m in 2015. It acquired the Russian lender in 2008 for $576m. Alone in 2014, Uniastrum generated a €299m loss.
CySEC said that Uniastrum’s earnings over 2009 to June 2012 totalled €26.5m and were on average 75 per cent below those projected.