Prosecutors on Thursday filed charges in Nicosia against former senior co-operative bank officials in connection with wrongdoings relating to loans worth around €3.6m.
According to the Cyprus News Agency, The charge sheet names seven individuals and two companies, including former co-op boss Erotokritos Chlorakiotis, former Strovolos co-op boss Demetrakis Stavrou, and former co-op development commissioner Constantinos Lyras.
The indictment also includes Maria Chlorakiotou, Carolina Angelopoulou, Maria Chrysanthou, Giorgos Mavreas, Detiero Enterprises and CHL Enterprises.
They are facing 19 charges relating to conspiracy to defraud, obtaining goods under false pretences, unlawful acquisition of property, and money laundering.
The case has been scheduled for January 25.
According to the details, between May and July 2007, the defendants had conspired to defraud – to secure illegal loans worth CYP2.1m (€3.6m) from Strovolos co-op.
The defendants also failed to disclose the real reason for a €119,602 loan and the recipient. They also provided false information, including the values of two properties used as collateral, to secure CYP2m (around €3.4m) from the same co-op.
During the same time, the defendants also secured CYP30,000 or €51,000 from Strovolos co-op under false pretences, the charge sheet says.
They are also accused of forging the minutes of the bank’s managing committee to show that it had approved a CYP200,000 (€341,720) to Detiero Enterprises.
Stavrou is also accused of preparing a loan review report long after the money had been given. The offence details said he forged the report between October 2012 and April 2014 when it should have been done in 2007, before the application for the €3.4m loan was presented to the committee for approval.
Stavrou faces a second charge for a similar offence relating to a €51,258 loan.
Chlorakiotis also faces a single charge of unlawful acquisition of property in relation with the €3.4m loan.
In 2015, a court granted a police request to access Chlorakiotis’ and his wife’s bank accounts as part of a probe into whether due procedure was followed in securing several loans adding up to €15m.
In 2013 reports emerged claiming Chlorakiotis, his wife and daughters, and a company whose sole shareholder was his wife, received €10.9 million in loans from the Strovolos Co-op several years previously, which were not being paid off.
One media outlet also published a letter to Chlorakiotis written by former Central Bank of Cyprus governor Athanasios Orphanides on March 8, 2010, in which he speaks of the significant delays in repaying the loans.
Orphanides suggested there was a conflict of interest, since it appeared that the loans kept Chlorakiotis from taking any measures to rectify the large capital deficit the Strovolos Co-op had.
The former CBC governor added that despite the problematic situation, Chlorakiotis and his family managed to restructure their debts, securing a three-year grace period.
Some of the loans matured in 2037, Orphanides said, a period that was far beyond the date of 66-year-old (at the time) Chlorakiotis’ retirement.