Cyprus Mail

Co-op welcomes external auditing, it says

THE Cooperative Central Bank (CCB) said on Thursday that it welcomes external auditing, provided however that these checks are lawful and done according to proper procedure.

“Checks do not frighten us,” Yiannos Stavrinides, head of the CCB’s Strategy and Communication Department, told the state broadcaster.

The matter of the CCB’s auditing resurfaced after auditor-general Odysseas Michaelides requested from the finance ministry that it assign him four to five former coop administrators to assist with his investigations into dodgy loans granted by cooperative banks in the past.

Michaelides wants the former coop administrators transferred to his office for a year to assist with his investigations, which form part of a broader probe into the reasons for the financial system’s meltdown in 2013.

The audit office’s help in investigating the coops was requested by the attorney-general, in a bid to expedite the wider probe into the collapse of the economy.

Michaelides’ request comes amid a debate on what audits the CCB should be subjected to – and by whom.

Recently the ruling Disy party tabled a bill that would prohibit the audit office from conducting administrative audits of the CCB.

Disy is citing the agreements signed by Cyprus and its international creditors – the Memorandum of Understanding and the Relationship Framework Agreement – arguing that these contained clauses precluding such auditing.

But Michaelides insists that any entity handling public moneys must be subject to audit by his office.

He has said that given the fact the CCB is a state-owned business to the tune of 99 per cent, having received €1.7 billion of taxpayer-funded capital in 2014 and 2015, it is subject to scrutiny by the Audit Office.

Meantime Michaelides has also set his sights on Nicholas Hadjiyiannis, CEO of the CCB, asking questions about the banking executive’s salary.

Officially, Hadjiyiannis’ earnings are stated as €200,000 per annum. But the audit boss suspects the real figure is far higher.

Michaelides has cited the minutes of a meeting at the CCB in July 2015, where a Berlin-based advisory firm, which drew up a list of potential candidates for the top job at the CCB, opined that Hadjiyiannis did not possess the adequate skills or know-how.

The firm reportedly said that, being a private banker, and lacking sufficient experience in retail banking, Hadjiyiannis would need to be supported by a team of experts.

And that, according to the auditor-general, meant that the position would end up costing far more than the €200,000 cited.


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