By Melina Demetriou
SECURITIES and Exchange Commission chairman Marios Clerides said yesterday that the Commission had been aware for the past month of the US investigation into fraud allegations involving GlobalSoft chairman Lycourgos Kyprianou.
But the Commission only issued an announcement on Friday to give investors a chance to be informed about the recent developments relating to the company’s chairman.
The Cyprus Stock Exchange (CSE) suspended GlobalSoft’s trading on Friday for one day only after the US Securities and Exchange Commission (SEC) filed a civil complaint in the Federal District Court in New York accusing Kyprianou and his associate Roys Poyiadjis of being involved in “one of the largest financial frauds in history”.The US SEC alleges that Kyprianou and Poyiadjis, former co-chief executives at AremisSoft, a publicly traded software company in New York, defrauded investors of at least $200 million. The two men are also alleged by the SEC to have engaged in “massive insider trading during the period of reported fraud”, selling millions of shares through offshore facilities. It was also claimed that AremisSoft falsified its books and records.The SEC contended that Kyprianou and Poyiadjis had used false financial statements to inflate the price of AremisSoft stock and then sold millions of shares in AremisSoft to unwitting investors during late 2000 and early 2001.
AremisSoft has invested heavily in GlobalSoft, the largest IT company in Cyprus.Clerides told the Sunday Mail yesterday that GlobalSoft trading had been suspended for a day to give the chance to investors to be informed about the investigation in New York.
We have known for months that AremisSoft was under investigation. But about a month ago we contacted the SEC. From contacts we made we figured out that Kyprianou was indeed a suspect. The SEC requested information concerning our legal system and other things — I can’t give more details,said.
Asked why the Cyprus SEC had not informed the public about the US SEC investigation into Kyprianou earlier, Clerides replied: First it was a general investigation into AremisSoft, then it started pointing to certain people. Anyway it was widely known that AremisSoft was under scrutiny.
“We are waiting for the investigation’s results to see whether GlobalSoft and investors in the CSE have been affected in any way by illegalities,said.
He said the Commission was co-operating closelythe US SEC on the matter, and also with other countries’and Exchange Commissions.
He described the allegations against the Kyprianou as very serioussaid that if found guilty he would be made to step down as chairman of GlobalSoft.
A New York federal judge on Thursday froze the assets of Poyiadjis and Kyprianou and directed them to return the proceeds of their stock sales.
Bloomberg financial news agency said that the judge, Charles Haight, would convene an October 18 hearing on the SEC charges.
Kyprianou lives in Nicosia while Poyiadjis is a British citizen who has a home in New York City, according to the SEC complaint. Richard Sauer, assistant director for the Commission’s enforcement division, would not say on Friday whether the authorities knew where Kyprianou and Poyiadjis were, but he said neither man was in custody.The Sunday Mail has been unable to reach Kyprianou for comment.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
