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Cyprus

Final verdict in Laiki trial in July

Managing director of former Laiki Efthimios Bouloutas

Having heard the litigants’ closing arguments, the Nicosia criminal court trying the Laiki case said on Tuesday it would be issuing its final verdict on July 24.

On trial are four defendants: former Laiki bank managing director Efthimios Bouloutas, former deputy managing director Panayiotis Kounnis, former non-executive vice-president Neoclis Lysandrou and former executive board member Marcos Foros.

They 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.

The lender was shuttered in 2013 as part of the island’s bailout agreement.

During the course of the trial the accused have disputed the allegation that at the time in question there was a need for a goodwill writedown, or that they withheld any vital information from shareholders.

In their summations on Tuesday, the defendants’ lawyers argued that the prosecution failed to demonstrate “fraudulent and deliberate” concealment of the goodwill writedown in an alleged bid to defraud investors.

They said the prosecution also failed to bring any direct evidence or testimony specifying the precise value of the writedown, and moreover claimed that no one at the bank at the time held that information, as the impact of the second ‘haircut’ on Greek debt holdings of October 2011 could not be accurately assessed.

For its part, the prosecution referred to a number of “trigger points” indicating a goodwill writedown, such as the worsening economy in Greece, sliding credit ratings and the bank’s increasing Emergency Liquidity Assistance.

All this information was sufficient for the defendants to have knowledge of the need for a goodwill writedown, the prosecution said.

The case was referred to a criminal trial on November 28, 2016, following delays after defendants Bouloutas and Foris refused to appear in person in a Cypriot court.

In March 2017 the court agreed that state prosecutors had managed to demonstrate a prima facie case against the defendants, of all whom pleaded not guilty.

The defendants subsequently chose to testify under oath and to be cross-examined.

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