President requests appointment of committee of inquiry to probe co-op

President of Cyprus Nicos Anastasiades asked on Wednesday the Attorney General Costas Clerides to appoint a committee of inquiry to carry out an in depth probe into the co-op, government spokesman Prodromos  Prodromou has announced.

In statements to the media, Prodromou said that the President, with the agreement of the cabinet, decided to request the Attorney General to exercise his rights under the law and appoint a committee of inquiry to probe all aspects of the operation of the co-op credit system, the Co-operative Central Bank and the Cyprus Co-operative Bank.

Prodromou noted that the President has proposed to the Attorney General that it would be right for the committee of inquiry to appoint, based on its own judgement, foreign experts, who specialize on such issues, with a view to fulful the probe within a certain period of time and publicize all the findings, with full transparency. 

Prodromou underlined that the aim is to inform the people of Cyprus for all those who may bear responsibilities.

The European Commission officially announced on Tuesday its decision to approve, under EU rules, Cypriot measures to facilitate the liquidation of Cyprus Cooperative Bank (CCB) under national law, which involve the sale of some CCB assets and deposits to Hellenic Bank.

The government of Cyprus has approved a deal on the Cyprus Co-operative Bank, following the offer submitted by the Hellenic Bank to buy out the bank.

According to the offer, the Hellenic Bank undertakes to pay the whole amount of the clients’ deposits worth 9.7 billion euro and assumes assets of 10.3 billion euro, including loans, bonds and cash as well as non-performing loans of 0.5 billion. Assets of the Cooperative amounting to 8.3 billion euro will be taken over by the state, most of which is non-performing loans.

Cyprus Cooperative Bank (CCB) is the second largest credit institution in Cyprus, as of February 2018, the Bank had assets with a book value around €12 billion, it had deposits around €11 billion and gross loans in the amount around €11 billion. CCB had around 2,700 employees and a network comprising around 170 branches in Cyprus.

The spokesman said that the President has suggested that the probe should look among others into the reasons that the co-op credit system remained out of the Central Bank of Cyprus supervision, even after Cyprus` accession to the EU, why and how co-op had to be recapitalized at the state`s responsibility and with the allocation of 1.5 billion in 2013, when and under which conditions non performing loans of up to 7,49 billion were granted.

Moreover, as he noted according to the President`s suggestion the probe should look into any non performing loans of politically exposed persons as well as of co-op management and top ranking officials, and the general management and possible political interventions to the operation of the co-op credit system, the Co-operative Central Bank and the Cyprus Co-operative Bank.

Asked how much time the probe will last, Prodromou said that the probe should deal with the substance of the co-op credit system operation and look into the practices that led to the non performing loans amounting to 7.5 billion.