Cyprus Mail

Co-op investigation mandate published

A three-member panel has been tasked with carrying out a full and thorough probe to determine the actions, decisions or omissions that drove the co-op bank to the ground, according to the terms of reference published on Friday in the government gazette.

The panel, appointed by the attorney-general last week, will be headed by former Supreme Court judge Giorgos Arestis, who also served as a judge at the EU court in Luxemburg.

He will be assisted by economist Giorgos Charalambous, a former Bank of Cyprus executive, former board member of the development bank and former head of the securities and exchange commission, and Giorgos Georgiou, a former executive at Alpha Bank and former chairman of the bank association.

The panel will be sworn in on Monday.

Its terms of reference include determining the actions, omissions, events, and conditions, or combination thereof, that led the co-operative bank to its current state.

The investigators will be looking at staff appointments, administration, corporate governance, including the structure and power and authority of the members of key management bodies.

Supervision will also be an issue, as well as the reasons why the sector had not been under the Central Bank prior to the island’s bailout in 2013.

Investigators will also probe the procedures of granting loans or other facilities and how bad debts were managed.

The co-op sector was notorious over the ease with which loans were granted, especially to family members, relatives and friends of people who worked there, and the spectacularly high non-performing exposure rates, which in some cases exceeded 70 per cent.

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