Former Bank of Cyprus (BoC) CEO Andreas Eliades, on trial on market manipulation charges, told a court on Monday that the lender had excess liquidity in 2012 and led the market in deposits.
Apart from the first three quarters of 2011, and despite the loss from the haircut on Greek bonds, never in its history did BoC have so much capital, Eliades said, adding that it had reached €2.85billion.
Eliades along with Bank of Cyprus, former board chairmen Theodoros Aristodemou and Andreas Artemi, former CEO Yiannis Kypri, and former deputy CEO Yiannis Pehlivanides, are facing market-manipulation charges in connection with their failure to inform the public from June 14 to June 26, 2012, that the lender’s capital shortfall, announced the previous month at €200million, was in fact more than double that.
The bank, Aristodemou, and Eliades, are also facing a charge of having misrepresented the value of the lender’s financial holdings to shareholders at their AGM on June 19, 2012.
Aristodemou and Eliades also face an additional charge, again relating to the AGM. They are accused of having withheld crucial information regarding the bank’s capital shortfall from the shareholders.
Asked why then did the lender apply for emergency liquidity assistance (ELA) from the Bank of Greece in May 2012, Eliades said it was part of their effort to ring-fence their Greek operations – isolating them from Cyprus. The Bank of Greece rejected the request.
The former CEO said they made the request not because they needed the cash but because they did not want to use the group’s liquidity.
He said there was always a “possibility of seeking state support … but our aim and all our energy focused on achieving the goal of covering the capital deficit.”
Eliades denied the charges, suggesting that announcing that that the lender’s shortfall was €400m would have been wrong and misleading.
“At that stage the sums were uncertain and vague and depended on the decisions that were going to be made later, either by the bank, when all data was ready, or by third parties outside the bank, like the external auditors, Esma (European Securities and Markets Authority) and the EBA (European Banking Authority),” he said.
He also denied withholding information from shareholders on June 19, 2012, adding that the same went for the board meeting five days earlier.
“If I wanted to hide information I could have done the presentation myself or ask Mr Hadjimitsis to change the presentation and take out or add topics and amounts,” he said.
“With all honesty towards the court, during the entire period I served as CEO I always worked solely for the interest of the shareholders and the bank,” Eliades said. “I did not hide nor did I distribute information that could possible mislead the shareholders, nor did I have any interest in doing so.”
Eliades said the efforts they made to cover the shortfall would have yielded results. He said it was a fact that the lender needed a relatively small sum to meet the limit set by the EBA and “I believe that a small extension and with everyone’s co-operation it would have covered the entire amount of the exercise.”