The supreme court on Wednesday acquitted former Bank of Cyprus CEO Andreas Eliades who had been jailed for two and a half years in jail earlier this year after he was found guilty of market manipulation through misleading statements to investors about the lender’s capital shortfall in June 2012.
The attorney-general later said he disagreed with the decision, which was taken by a two-one majority.
The former CEO and the bank as a legal entity were found guilty in January this year of providing misleading information to investors during the bank’s annual general meeting (AGM) of shareholders on June 19, 2012. The misleading statements related to the bank’s capital shortfall at the time.
BoC was also acquitted on Wednesday.
At the AGM in question, it was claimed the bank was close to full recapitalisation and that the capital shortfall was at €200 million.
But in a letter to then Central Bank chief Panicos Demetriades, dated June 20, 2012 – one day after its AGM – the bank raised its capital needs to approximately €400m.
The court said it did not consider Eliades’ action at the AGM as a bid to make gains by fiddling with the price of the company’s share.
“In this case, we think there was no such manipulation,” the two supreme court judges said in their ruling.
If that were the case, the judges said, why didn’t Eliades use it in his opening speech, which the criminal court found to contain no information that could have been judged as being misleading as concerns the shortfall.
The decision said Eliades’ effort at the time was to avoid the pressure and to handle the angry shareholders and their persistent questions.
“He didn’t want to give the true picture at the time,” the criminal court said. “This, however, in itself, does not constitute a criminal offence, especially a felony.”
But the attorney-general, Costas Clerides, said he disagreed with the decision though he would respect it.
Clerides said the criminal court had unanimously found Eliades and the bank guilty of market manipulation, in a case that took a lot of effort to bring to justice.
“The three-member appellate court had a different view, by two-one majority,” he said. “Although court decisions, even by majority, are always respected, I cannot but express our disagreement … both in relation to its legal aspect and the rationale it presents.”
In his view, the attorney-general added, the decision made proving such cases in court “almost impossible” because despite the proven and recognised deception caused to the shareholders and potentially the wider public by false statements uttered by bankers, market manipulation was not substantiated, according to the decision.