News Column

Former Central Bank chief jeered in bond-sale court case

August 11, 2014



By Elias Hazou

BONDHOLDERS who lost money with ex Laiki Bank again heckled former Central Bank chief Athanasios Orphanides as he reappeared in court on Monday.

Orphanides was met with shouts of "thief" and "traitor" as he showed up at Limassol district court with his lawyer. A water bottle was also hurled at the former top banker, reports said.

A Limassol resident has initiated the case against Orphanides as Central Bank governor at the time, and against members of former Laiki bank officials, claiming he was duped into buying 400,000 worth of high-risk, high-yield bonds.

According to the civil lawsuit, Laiki Bank in cooperation with Orphanides sold the plaintiff the bonds "in a fraudulent manner".

The plaintiff is accusing Orphanides along with former Laiki strongmen Andreas Vgenopoulos and Efthimios Bouloutas, as well as Laiki bank as a legal entity of conspiring to defraud him of the amount.

The court on Monday rejected an earlier motion by Orphanides' lawyer to revoke the charge sheet.

The court said the charge sheet touched upon the substance of the case, and as such could not be adjudicated upon during the pre-trial phase.

The judges ruled also that Orphanides' case should be heard in tandem with the cases of Vgenopoulos and Bouloutas, who have been summoned to appear in court on September 10.

The trials of Vgenopoulos and Bouloutas have not yet started as the hearing of a request by their lawyers for proof of legally handing them subpoenas is pending and had been scheduled for September 10.

As such the court gave Orphanides permission to return to the United States, where he currently teaches at MIT. Orphanides was additionally ordered to return to Cyprus to stand trial on November 3, and his bail was raised to 30,000 from 10,000 previously.

Laiki Bank was shut down last year as part of an international bailout agreement.

Hundreds of bondholders in the island's major banks claim they were misled by the banks into putting their savings in high-yield securities without being informed of the risks.

The total amount put in securities is said to be around 1.4bn.

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Source: Cyprus Mail


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