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Cyprus

Former Laiki chiefs plead not guilty to mismanagement

Now-defunct Laiki Bank

Four former top officials at Laiki Bank on Thursday pleaded not guilty to charges of mismanagement at the now-defunct lender.

Former bank CEO Efthymios Bouloutas, former deputy CEO Panayiotis Kounnis, and former board members Neoklis Lysandrou and Markos Foros are facing charges of market manipulation and presenting false/misleading information to investors.

They are accused of concealing the true goodwill value of Marfin Popular Bank – as it was then known – in filings to the Cyprus Stock Exchange (CSE) in November of 2011.

Goodwill is the established reputation of a business regarded as a quantifiable asset and calculated as part of its value when it is sold.

Specifically, on November 29, 2011 the bank filed its condensed consolidated interim financial statement for the third quarter ended September 30 of the same year.

In the filing, according to the charge sheet, the four officials and the bank omitted to disclose the significant decrease (some €300 million) in the goodwill value of the bank’s operations in Greece.

In court on Thursday, the defendants’ lawyers submitted two pre-trial objections. The first was that the current law on market manipulation, as it has been amended, does not entail criminal liability, and therefore the charge cannot be considered a criminal offence.

The second objection was that the details of the charges were not sufficiently substantiated.

After hearing both sides, the court issued an interim ruling dismissing both pre-trial objections, at which point all defendants entered a not-guilty plea.

The next hearings have been set for November 21, 23, 27, 28 and 30.

The case had been referred to a criminal trial a year ago, but was delayed due to Bouloutas’ and Foros’ refusal to present themselves in court.

Bouloutas and Foros currently hold senior positions at Marfin Investment Group (MIG), the group that took over management of Laiki in 2006.

 

 

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