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Deputies point fingers over banks’ crisis
LAWMAKERS yesterday demanded to know the names of people – including bank executives, board members and politicians – who may have received preferential treatment in securing loans, as part of a probe into the operations of the financial sector.
MPs also want to know who had their loans written off and whether any bank board members were also linked to companies.
Attorney-general Petros Clerides suggested that it would be “practically impossible” for the information to be put together.
“Do you really expect the Central Bank (CB) or the finance ministry to give you a list that includes all those who got loans at lower interest rates from the CB, Bank of Cyprus, Popular bank, Hellenic Bank or their village cooperatives?” Clerides said.
He wondered rhetorically if it would be possible for authorities to find out from the Agros cooperative whether his mother-in-law’s fourth niece had received preferential treatment in securing a loan.
Independent MP Zacharias Koulias replied that they only wanted the information concerning Bank of Cyprus and Popular, because, they received state assistance (only Popular has received state support).
Clerides pointed out it was wrong anyway.
“Is it not wrong for someone to get preferential treatment at any other bank?” Clerides said.
Lawmakers asked dozens of questions and also made allegations and insinuations, which remained unanswered.
Committee chairman, EVROKO MP, Demetris Syllouris said all questions will be put in writing and officials can respond at a next meeting, which will take place behind closed doors.
Meanwhile, serious allegations were left lingering.
DISY MP Kyriacos Hadjiyiannis asked if rumours were true that a member of the team carrying out an audit of the banks’ loan portfolios had worked as an advisor in various bank administrations and whether a member of another organisation – investigating why banks sought state support – was close to an (unnamed) banker who affected the sector.
AKEL on the other hand took a shot at former CB governor Athanasios Orphanides who allegedly received loans with a zero to 1.0 per cent interest rate.
AKEL MP Pambos Papageorgiou asked whether Orphanides had returned two laptop hard drives he had taken with him after he left the position.
“Will the CB examine the legality of the loans?” AKEL lawmaker Irini Charalambidou said afterwards. “We want to know if he will return the two drives and if it is considered a criminal offence if he does not.”
The Cyprus Mail understands that the loan Orphanides received was to buy a house. Borrowing from the CB was provided for in his contract – and those of previous governors – in order to prevent conflict of interest by going to a commercial bank.
The interest rate is in line with the rates paid by all bank employees.
Orphanides had said that the hard drives held personal email correspondence, which had nothing to do with the CB.
There was no way this data could be erased from the hard drives, the former governor said.
A statement released by his lawyers in September said: “That was the reason why, during talks between Mr. Orphanides and bank officials prior to his departure in April 2012, it was decided that the hard drives would be removed from these laptops before the latter were to be returned to the Central Bank.”
Just hours later, Fitch Ratings said it had has taken various rating actions on Bank of Cyprus' (BoC) 'BB-'/Negative, and Cyprus Popular Bank's (CPB) 'BB-'/Negative Cypriot covered bonds.
BoC covered bonds (Greek cover pool) were downgraded to 'BB-'/Negative from 'BB'/Negative; BoC covered bonds (Cypriot cover pool) were downgraded to 'BB'/Negative from 'BBB-'/Negative, CPB covered bonds (Programme I) were downgraded to 'BB-'/Negative from 'BB'/Negative and CPB covered bonds (Programme II) were downgraded to 'BB'/Negative, from 'BBB-'/Negative.
The rating actions follow Fitch's downgrade of Cyprus to 'BB-'/Negative/'B' from 'BB+'/Negative/'B' on November 21 and the subsequent downgrade of the banks.