Announcing that the Bank of Cyprus’ capital needs rose from €200 to €400 million from May to June 2012 would have been inaccurate and misleading, former non-executive board vice-chairman Andreas Artemi told the court on Tuesday.
Artemi, accused along with four other former top officials and the bank itself, of manipulating the market by failing to disclose the bank’s true capital needs to the investing public took the stand to testify on the board’s decision to not issue an announcement of increased capital needs after being briefed to this effect by former financial director Christis Hadjimitsis on June 14, 2012.
Reading from a prepared statement, Artemi said that “following Mr Hadjimitsis’ presentation on June 14, 2012, and in the absence of any recommendation by the bank’s competent officials, I never considered the briefing we received as specific information that constituted an announceable fact”.
“On the contrary, I believed that the briefing was for the board’s information with regard to where deliberations to establish the bank’s capital needs, as a result of the European Banking Authority’s stress-tests, stood, as well as what additional clarification was required before the bank could announce its capital shortfall within the deadline, which expired at the end of June 2012,” Artemi said.
Such briefings to the board on ongoing matters were routine, and there was never any issue of disclosing anything before their settlement, he added.
“Even today, I believe that a statement like the one included in the charge-sheet – that is, that ‘the Bank of Cyprus’ capital needs had been substantially increased to approximately €400 million, relative to the amount of €200 million that had been announced on May 10, 2012’ – would have been inaccurate, fractional, and misleading,” he said.
The reason, he explained, was because, on the one hand amounts at that stage remained uncertain and unclear and were only estimates dependent on decisions yet to be made, either by the bank or by external bodies, and on the other the possible positive outcome of one or more pending issues – like the sale of the bank’s insurance companies – would have completely overturned a rushed disclosure for a capital shortfall of €400 million.
Artemi argued that he had no reason to delay or avoid such disclosure had he considered it warranted.
“The only motive a board member could have had would be to delay the disclosure in order to ‘dump’ his shares before the share price fell,” he said.
“However, in addition to the fact that I have never traded shares for profit, the period in question was closed for trading to all board members, so selling shares would have been illegal for any board member.”
Artemi expressed feelings of bitterness because “in the name of delivering justice on those responsible for the economic collapse, I was taken to the criminal court for a case that, for the most part, is based on a judgement call in good faith”.