‘We did not have loans written off’ : Former President and MP’s on the List

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By George Psyllides Published on March 30, 2013



THE government yesterday reaffirmed its intention to fully investigate the banking sector, as a list surfaced with names of current and former state officials who allegedly had their loans written off by banks.

The list, published in Greece, contains the names of former and current MPs as well as other prominent individuals, including former president George Vassiliou.

According to the report, Vassiliou held a 51 per cent stake in a company that agreed to have $5.8 million written off.

The government said the matter would be investigated as part of a wider probe into what caused the collapse of the island’s economy and banking system.

Three former Supreme Court judges were appointed on Thursday to look into the debacle.

Their mandate includes the investigation of the “the events and decisions relating to the provision or write off or reduction of loans or the removal of guarantees or banks affording other concessions, in Cyprus and abroad.”

The government said it would handle the matter with full transparency and would not hesitate to hold anyone accountable as long as any improprieties were substantiated.

A lot of the people on the list denied the allegations yesterday.

Former president Vassillou said his stake in the company, which was operated by his former son-in-law, was acquired after he provided guarantees against its large obligations.

The company, ERE (Middle East) Ltd owed Laiki $23,988,542 and €1,081,672, including interest, the former president said in a written statement.

The amounts had been also guaranteed by four other people who eventually refused to honour their obligations and were taken to court.

Vassiliou said that despite his share being much smaller, he agreed to pay Laiki $21 million and settle the debt.

Based on the agreement, Vassiliou paid $15 million while the balance was going to be settled in two instalments of €3 million in 2012 and 2014.

“In return, Laiki was to relieve me of the old interest, something that is a usual and long-standing practice,” Vassiliou said.

Because the 2012 instalment was linked to the return of a guarantee as soon as a – still pending — project was completed in Qatar, it had been agreed for the payment to be pushed back until then, Vassiliou said.

The former president said he would wait for the findings of the attorney-general.

DISY MP Prodromos Prodromou, whose name was also on the list, said he was suing the media outlets responsible, and the Central Bank of Cyprus.

Prodromou denied ever having a loan written off, saying the case in question concerned a forgery on his bank account.

“The person responsible for the forgery was brought before court and convicted,” Prodromou said. “The bank recognised part of the responsibility for the charges through forgery and agreed to share the loss.”

AKEL-linked trade union PEO was also included in the list over a €3.0 million loan.

The case had already been reported late last year by the Cypriot media.

The union said once more that the bank’s decision, for those who know the facts, “was legally and morally logical and had nothing to do with political intervention and favouritism.”

Former DISY MP Sofoklis Hadjiyiannis said his case concerned interest and other charges that were added on illegally after he settled his debt to the bank.

AKEL MP Nicos Katsourides was also caught up in the affair after he was linked with a company that allegedly had a debt written off.

Katsourides said neither he nor any family member had any relation with the company’s share structure although his son had been employed by the outfit at some point in the past.

Katsourides said he had contacted the attorney-general and asked him to hand the list over to the investigating commission looking into the economic debacle.

DISY MP Soteris Sampson also denied the allegations, saying he would make public his bank transactions as soon as they were provided by the bank.

Former agriculture minister Timis Efthymiou said his obligations to the Bank of Cyprus stemming from him being a shareholder in a company “have been met by paying off a loan within the framework of a legal settlement with the bank in 2008.”


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