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Committee to probe politically exposed persons with bad debts

The issue dates back to when Chrystalla Georghadji was governor of the central bank

Parties on Wednesday decided to set up an ad hoc committee to look into a controversial list of politically exposed persons (PEPs) with bad debts, which has been the object of acrimony for the past year.

The meeting was called in the morning by House president Demetris Syllouris with the aim of expediting the matter and getting a result.

The committee’s terms of reference and composition will be decided by Friday so that it gets the plenum’s green light. Party leaders will meet again on Friday morning, according to reports.

The effort is to have a result by the end of the month.

The PEP document – marked ‘confidential’ – was first delivered to Syllouris by former CBC boss Chrystalla Giorghadji in April of 2019 just before she stepped down.

Days later, Syllouris held a courtesy meeting with her successor, Constantinos Herodotou. During the meeting, Syllouris surprised the governor by handing him back the list and asking the bank to process data held by commercial banks regarding delinquent loans held by politically PEPs and on possible circumspect debt write-offs.

The issue has been going back and forth since prompting suggestions that parties had something to hide.

Green party chairman Giorgos Perdikis said on Wednesday that appointing the ad hoc committee was also their position.

He said the committee should examine the list as soon as possible and publish it within weeks.

Perdikis expressed concern that the matter would be shelved, dealing yet another blow to the parliament’s and politicians’ dwindling prestige.

“The delay, the repeated postponements, and time-consuming procedures go against the aim, which is transparency,” he said.

In December 2018, Georghadji had told MPs she had stopped looking into bad loans of PEPs because she “got scared” when police seized her computers and questioned her.

Georghadji told the House finance committee that in 2015 she began gathering data on PEPs who had bad loans with Cypriot banks and that later in the same year someone had leaked a list of MPs and their loans at the Bank of Cyprus to the media.

It showed that out of the 37 MPs listed, 19 owed the bank a total of €51.2m and 13 of those had NPLs totalling €35.3m.

At the time, furious MPs spoke of an attempt by the central bank to blackmail lawmakers through leaks to the press with information about their loan arrears.

Following a complaint filed by MP Zacharias Koulias – the current chairman of watchdog committee — that his personal data had been violated, police entered the central bank with warrants to search the premises.

 

In August 2019, the attorney-general issued a legal opinion saying Kedipes – the successor entity to the since shuttered co-operative bank – is obligated to hand over information as part of a probe into the co-op bank having afforded favourable treatment to PEPs in terms of loan restructuring.

In September, it was reported that the co-operative’s internal audit department had found over 700 PEP customers of the bank were behind on their loan repayments.

The internal audit department tracked €134m worth of delinquent loans associated with PEPs, and also €9.8m in debt write-offs. In some PEP accounts, the account holders held sufficient deposits to repay their loan arrears but had failed to do so.

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