Cyprus Mail

Georgiades deflects responsibility for Co-op

Harris Georgiades

By Stelios Orphanides

Finance minister Harris Georgiades said that he expects to be summoned to the committee probing the breakdown of the cooperative banks but deflected responsibility for the bank’s gaps in governance.

While Georgiades, who was commenting on state-radio CyBC on Tuesday, after the committee appointed by Attorney-general Costas Clerides resumed on Monday, said that he wouldn’t consider it “appropriate” to comment on the testimonies of the five witnesses so far, he made reference to the issue of political interventions.

“It wouldn’t be ethical as it could be interpreted as an attempt to influence the committee’s conclusions, although I haven’t been summoned I think that it is reasonable that I will too be summoned at some point,” he said.

“I was hearing yesterday that the chairman state the opposite, that there had never been political interventions,” he said in an obvious reference to the testimony of Christakis Taoushanis who testified on Monday and said that he had not been recipient himself of interventions from politicians.

In his testimony, Taoushanis lambasted the bank’s executive management for entering a deal with Spain’s non-performing loans specialist Altamira without seeking expression of interest from other parties, as well as the government’s decision to donate 25 per cent of the state-owned Cyprus Cooperative Bank to its customers. During Taoushanis tenure, the bank’s chief executive officer (CEO) was Nicholas Hadjiyiannis, a childhood friend of the finance minister, who advanced from the position of the chairman of the Co-op to its top executive under questionable conditions.

Demetris Theodotou, a former board member who said that he was sacked without any explanation after expressing disagreement about the bank’s organisational structure, said that Hadjiyiannis’s name had not even been in the shortlist of candidates when the bank sought to replace former CEO Marios Clerides in 2015. He also added that while there was dissent in board meeting that decided on Hadjiyiannis’s appointment expressed by him and another board member, this was not included in the minutes.

Clerides told the committee on Friday that while he was serving as CEO of the Co-op, which the taxpayers bailed out with €1.7bn, he noticed that board, chaired then by Hadjiyiannis, had garnered excessive powers.

“But I don’t want to go that road to comment on air the testimonies of an institutionalised investigative committee,” Georgiades said.

The bank’s corporate governance, he continued, was after all “the reason the Co-op was led to a financial impasse and required the state bailout”.

“How could an organisation have the proper structures which was not an organisation and was (instead) a network of almost 100 local branches?” he asked.

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