News Column

Georgaides dismisses 'conspiracy' claims by ex-Laiki depositors

June 11, 2014



By Staff Reporter

FINANCE Minister Harris Georgiades has branded as conspiracy theorists a group of ex-Laiki depositors claiming the government has handed control of the Bank of Cyprus (BoC) over to the troika.

The allegations were made by the association of Laiki depositors (SYKALA), who said the mooted transfer of the 18 per cent stake in Bank of Cyprus (BoC) to the European Bank of Reconstruction and Development (EBRD) represents a serious conflict of interest.

Reports have suggested that the 18 per cent stake held by the now defunct Laiki Bank in BoC could be transferred to the EBRD, which will function as an investment banker to manage the stake, but also as a strategic investor for the eventual purchase of this share.

SYKALA which had laid a claim to the 18 per cent but lost its case in court is opposed to selling the stake.

Speaking at a news conference yesterday, SYKALA claimed to have discovered a gross conflict of interest, whereby European Commission official Maarten Verwey, one of the leaders of the troika mission to Cyprus, is also a director on the EBRD board.

At the same time, argued SYKALA member Theodoros Kyprianides, 58 per cent of the stake in the EBRD is held by EU member states, who are represented on the EBRD board by Verwey.

And given that the single largest shares package in BoC could go to the EBRD, that would mean that the troika via its point man Verwey would have effective control over BoC, he reasoned.

Kyprianides went on to lambast the finance minister for backtracking on a promise to consider giving control of the 18 per cent stake in BoC to the Laiki depositors.

"Very quickly the minister changed his mind, taking cover behind the resolution law so that the Laiki depositors who suffered a haircut would be excluded from controlling the 18 per cent," he added.

Cyprus has agreed a 10bn international bailout which provided for Laiki to be shut down and for the seizure of deposits over 100,000 to recapitalise BoC. Laiki has been absorbed by BoC.

Under the deal, the Resolution Authority was to instruct Laiki's administrator to entrust, by end-January 2014, the voting rights of these shares to a well-recognised and independent consulting or auditing firm or an international institution.

The Resolution Authority in Cyprus (Central Bank, Finance Ministry, Securities and Exchange Commission), which administers the percentage held by Laiki in the share capital of BoC, could transfer its voting rights to the EBRD.

Hitting back at SYKALA's claims, Georgiades suggested the association should have done its homework before firing off allegations.

He said a quick look at EBRD's website would suffice to show that EU member states with a stake there represent themselves on the EBRD's board, and are not represented by Verwey.

"Ever since they (SYKALA) lost in court, they have been complaining and resorting to conspiracy theories. This is not serious," the minister said.

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Source: Cyprus Mail


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