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Cyprus

Government admits some co-op properties were sold, defying promises

Cooperative Central Bank CCB

THE government on Thursday admitted the sale-for-cash of certain properties belonging to the now-defunct co-operative bank, but also said it has put an end to the practice.

Speaking in parliament, finance minister Harris Georgiades said that on January 31 this year the cabinet decreed the establishment of a technical committee, tasked with cataloguing and valuing all the real estate formerly owned by the Cyprus Cooperative Bank (CCB).

As of that date, he added, the sale of CCB properties has ceased.

By April, Georgiades said, the government will decide which of the properties would be purchased by the state; the rest are to be made available to local communities, which would rent them for a token fee.

Georgiades was summoned to the House watchdog committee to answer questions about the sale of the properties, in breach of earlier government pronouncements – including by president Nicos Anastasiades – that the real estate belonging to the CCB were to be transferred to municipalities and local communities to be used as cultural centres or for charitable activities.

In parliament, it emerged that prior to January 31 at least two such properties – one in Lythrodontas, the other in Sotira – had been sold to private concerns via auction.

The co-op was wound down in August last year, with its ‘good’ part being sold to Hellenic Bank and the ‘bad’ part transferred to a co-operative asset management company, known as Kedipes.

Kedipes took over €8.3bn worth of assets, including €6.97bn in non-performing loans and around €620m in immovable property previously on the co-op’s books.

The finance minister said that other than the 113 store branches of the CCB – now operated by Hellenic Bank – on the CCB’s books, there are 2,815 properties, of which two-thirds are plots of land and the rest are offices, flats and residences.

The former co-op’s most important asset are its loans, he noted.

The company (Kedipes) owes the state some €3.5bn.

“Theoretically, if we wanted, we could be paid back in real estate, whose value comes to €600m,” the minister stated.

He explained that the CCB’s real estate assets have not been transferred to the state. Rather, they are still owned by Kedipes (since renamed to Sedipes), the asset management company set up to dispose of the defunct CCB’s residual assets.

Sedipes does not have a banking licence.

For his part, auditor-general Odysseas Michaelides cautioned that questions hang over the legality of transferring the former CCB’s properties to Kedipes.

He said it looked like the state would end up losing €1.67bn from the co-operative banking sector – and that was the best-case scenario.

Earlier this year, Central Bank governor Chrystalla Georghadji admitted that the legal status of Sedipes was tenuous.

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