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Cyprus

Former Laiki exec says he’s been made a scapegoat

Managing director of former Laiki Efthimios Bouloutas

By George Psyllides

A former Laiki Bank executive on trial for the lender’s collapse in 2013, said Monday he and other defendants have been made scapegoats and there was no truth in the charges they were facing.

“I believe we have been targeted as scapegoats,” then-managing director Efthimios Bouloutas told the Nicosia criminal court. “There is no trace of truth in the charges we face and I want to state I am innocent.”

Bouloutas, his deputy Panayiotis Kounnis, non-executive vice-president Neoclis Lysandrou and executive board member Marcos Foros face charges of market manipulation and submitting false or misleading information with regard to publishing an interim consolidated financial statement in November 2011, in which they omitted to include a goodwill writedown of €330m for Marfin Popular Bank’s – as Laiki was then known – operations in Greece.

On March 21, the court found that prosecutors had established a prima facie case and the former executives must mount a defence to have it disproved.

Bouloutas, a Greek national, said he felt his rights as a European citizen had been violated, suggesting there was a pressing need to charge him before Cypriot justice without first considering what he had to say.

Bouloutas said it was parliament’s March 25, 2013 decision that “placed a tombstone on the Cypriot banking system.”

His was referring to parliament’s decision to shutter Laiki and seize deposits in Bank of Cyprus after having rejected a milder haircut on all deposits in all banks a week earlier.

“Both banks would have been in operation today without imposing the extreme haircut,” he said.

On the goodwill omission, Bouloutas said the board did not have a clear picture of the situation created after the EU decided the second writedown on Greek debt in October 2011, inflicting huge losses on Laiki and Bank of Cyprus of around €4.5bn.

He said it had been completely unexpected and without details. The questions raised at the time where only answered on February 24, 2012, he told the court.

Their position was that without the practical implementation of the programme they were n ot able to make the correct accounting calculation.

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