The compliance department at Laiki Bank gave the okay for some €1m to be transferred to an account belonging to the son-in-law of former central bank governor Christodoulos Christodoulou without the necessary supporting documents, the Nicosia criminal court heard on Wednesday in the corruption trial involving the disgraced top banker.
According to the manager of the Laiki branch where Andreas Kizourides, one of the defendants, had an account, €1.06m had been transferred from the account in Greece, of AC Christodoulou Consultants Ltd, a firm belonging to the former governor’s daughter, to his former son-in law.
The cash was initially paid to the firm on July 27, 2007 by Focus Maritime Corp, which belonged to Michalis Zolotas.
Prosecutors say the cash was paid to Christodoulou in exchange for agreeing to the 2006 takeover of Laiki by Greek financier Andreas Vgenopoulos. Laiki has since been shuttered.
Andreas Panayides, who worked at the lender’s compliance department at the time, told the court on Wednesday that the decision to accept the cash and subsequently release it without the necessary documentation had been made by the director, Era Michaelidou, and the sector chief, Miltiades Miltiadous.
Kizourides claims the cash was paid against the sale of two plots of land in Strovolos. The initial payment from Focus to AC Christodoulou had been justified as “consultancy services” without any accompanying documentation.
When it was transferred to Kizourides’ account in Cyprus, the branch initially put the cash on hold pending the submission of the supporting documents proving the land sale.
The instructions were that any withdrawals would only be allowed if the documents were presented.
However, Michaelidou and Miltiadous instructed the branch to release the money without the paperwork.
Kizourides, who represents himself in court, submitted to the branch manager, Yiannos Christodoulou, that he had told him at the time the cash was for two plots he sold them as part of his divorce. The witness said he could not remember hearing such a thing.
Panayides told the court that Kizourides supplied the branch with a letter informing them of the money’s provenance.
He also said Kizourides had informed the bank that the transfer of the land would be take two weeks to be done and asked that the money be transferred to his account.
Panayides also named Michaelidou and Miltiadous as the ones who made the decisions.
Apart from Christodoulou, Zolotas and Kizourides, the charge sheet includes former Laiki official Michalis Fole, the former governor’s daughter, Athina, and companies AC Christodoulou Consultants Ltd, Marfin Investment Group (MIG), and Focus Maritime Corp.
The defendants face a total of 24 charges including corruption, bribery, abuse of authority, abuse of trust, and money laundering.
Zolotas faces a single count relating to money laundering.
Vgenopoulos, widely considered the protagonist in the collapse of the island’s banking system in 2013, died in November 2016.