By Melina Demetriou
INVESTORS’ association PASECHA yesterday urged its members to file lawsuits against GlobalSoft and asked the government to freeze the assets of the company’s chairman, Lycourgos Kyprianou, in the light of a US investigation into fraud allegations involving Kyprianou.
Responding to the PASHECHA call, the Securities and Exchange Commission (SEC) yesterday announced that it would order an investigation into GlobalSoft’s dealings and suspend the company’s trading until the investigation is completed.
” The shares of Globalsoft will not trade and because this is a first of its kind incident we will convene on Wednesday and try find an alternative solution for shares of GlobalSoft to be traded,”the SEC announced yesterday. ” We decided to appoint external auditors to comb through GlobalSoft’s books.”
PASHECHA yesterday called for Kyprianou’s assets and those of other top ranking GlobalSoft officials in Cyprus to be frozen and urged investors to file lawsuits against the company for illegalities which the association claims the company has committed.
The SEC issued an announcement on Friday to tell investors about the New York investigation into Kyprianou. The Cyprus Stock Exchange (CSE) suspended GlobalSoft’s trading after the US Securities and Exchange Commission 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 Cyprus SEC chairman Marios Klerides said on Saturday that GlobalSoft’s trading had been suspended for a day only ” to give the chance to investors to be informed about the court case in New York” .
But after PASHECHA’s reaction to the news yesterday, the SEC decided to maintain the bar on the company’s trading and set the record straight amid growing fears that GlobalSoft and investors in the CSE have been affected by the allegations surrounding Kyprianou.
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.
Klerides, who has described the allegations against Kyprianou as very serious, said 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.
Globalsoft has said the company had no commercial links with AremisSoft and that it had confidence in its chairman. AremisSoft owns about seven percent of Globalsoft.
Kyprianou lives in Nicosia while Poyiadjis is a British citizen who has a home in New York City, according to the SEC complaint.The Cyprus Mailhas been unable to reach Kyprianou for comment.
