Cyprus Mail

Auditor-general insists co-op audit is not political intervention

Former co-op CEO Nicholas Hadjiyiannis

Auditing the Central Co-operative Bank (CCB) should not be considered a political intervention, Auditor-General Odysseas Michaelides said on Wednesday, as he criticised anew the hiring procedures followed in filling certain positions at the bank.

“We disagree with the possibility of exempting the co-op sector from an audit,” he told MPs. “We think there are no grounds for the argument that an audit can be considered a political intervention.”

Michaelides said such audits were being carried out at state banks in Germany, France, Slovenia and Portugal.

Of reports that the European Commission opposed the audit, Michaelides said these were media reports.

“We think the commission could not officially consider auditing a state enterprise an intervention,” he said.

The auditor stressed that no one wanted the CCB to become a government department.

“It is however, a service that belongs to taxpayers and taxpayers want this bank to follow healthy practices,” he said. “It is not a healthy practice to hire people without an announcement.

“It is not healthy practice to hire people on much better conditions than those in the market,” Michaelides said, referring to current CCB CEO Nicholas Hadjiyiannis.

Despite the attorney-general giving the go-ahead for an audit twice, the process has been hindered by the CCB and the finance ministry.

Finance Minister Harris Georgiades believes that the CCB, which was bailed out by taxpayers in 2013, should be treated as non-state owned, citing the need for flexibility dictated by competitive market conditions.

Georgiades suggested that legislation relating to co-ops could be subject to interpretation.

“There are courts which ultimately interpret whether something is legal or not,” he said.

This prompted an angry response from Attorney-General Costas Clerides who accused the minister of contempt.

Clerides said Georgiades’ comments defied “constitutional provisions” according to which the Republic’s law office and the AG were the legal counsellors to ministers and their opinions have to be respected and applied by government agencies.

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