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Cyprus Investigator Says Closed Laiki Bank Chairman Too Old for Prosecution

January 25, 2018

NICOSIA – The former chairman of the Laiki Bank that was shut down during Cyprus’ economic crisis escaped prosecution on mismanagement charges because he was too old and too frail.

Lead investigator Marcos Nicolettis told a criminal court that Constantinos Mylonas was 85 when questioned in 2015 and appeared not healthy enough to be brought to justice although four other former top managers at the bank are on trial.

Defendants are Laiki’s then-Managing Director Efthimios Bouloutas, his deputy Panayiotis Kounnis, Non-executive Vice-President Neoclis Lysandrou and executive board member Marcos Foros.

The are accused of market manipulation and submitting false or misleading information in an interim financial report in November 2011 which didn’t include a goodwill writedown of 330 million euros ($409.48 million) for Marfin Popular Bank’s – as Laiki was then known – operations in Greece.

Testifying as a prosecution witness, senior officer Nicolettis said Mylonas was “a proper and extremely polite elderly man” when he gave statements to police in October 2015, the Cyprus Mail reported.
Nicolettis said the former chairman had accidentally spilled coffee over some documents while giving a statement and accidentally scratched his car as he was leaving the premises which the investigator indicated was proof enough the former bank executive shouldn’t be forced to come into court.

Nicolettis denied investigators weren’t digging deep enough to find out what happened at the bank that shut down after President Nicos Anastasiades, reneging on campaign promises, allowed the confiscation of 47.5 percent of bank accounts over 100,000 euros ($124,090) to save banks from huge losses in their holdings of Greek bonds that were devalued 74 percent and in bad loans to Greek businesses who wouldn’t pay them back.

The investigator said there was no attempt to provide cover for the bank’s former Deputy CEO Christos Styliandes and use him as a prosecution witness and that there’s no reason to call for more statements or prosecute anyone else.

Bouloutas was chief suspect because of his position at the bank, the investigator told the court, denying police had not taken statements from the other two because of a “pre-determined decision to charge them,” the report added.

In 2013, the BBC reported on the internal chaos when it was announced the bank would shutter with some employees saying it began to spiral out of control when Greece’s Marfin Investment Group (MIG) took it over in 2006 and began handing out loans without enough collateral to Greek companies, including 700 million euros ($868,060) to a shipping company, losing about half of it, and another 500 million euros ($620.43 million) to a Greek TV company.

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