By Poly Pantelides
Former Bank of Cyprus (BoC) executive Yiannis Kypri said on Tuesday he will appeal last week’s decision to fine him over the lender’s sizeable Greek sovereign bond investments in 2010.
Kypri said he had instructed his lawyers to appeal the fine to the Supreme Court, following through on his legal right to do so.
Kypri is one of six former senior officials who, alongside the BoC as a legal entity, were slapped with administrative fines totalling €460,000 by the securities and exchange commission (SEC) for failing to announce the purchase of €2.4 billion worth of Greek government bonds (GGBs) in 2010.
Kypri said in an announcement that the SEC’s decision had not “borne in mind all the data and crucially important facts that were put to it and its investigating officials”.
Kypri got two fines totalling €120,000 for failing to inform the investing public “as soon as possible” as the law prescribed, of two separate transactions that significantly raised the bank’s Greek debt. SEC said that Kypri would have been responsible, by virtue of one of his positions, for preparing and publishing the relevant statements to the Cyprus Stock Exchange.
The BoC acquired the bonds on January 12 and April 27 in 2010. Kypri had assured investors via financial news portal Stockwatch in December the previous year that most of the bank’s GGBs holdings had been sold off.
The amount of GGBs the BoC accumulated in 2010 were disproportionately large compared with the bank’s capital and according to credit rating agency Standard & Poor’s, it was an investment in junk, or low grade bonds.
“When an investment amounts approximately to the size of the bank’s own capital, the least the average rational investor would expect is to be informed, which was not the case,” SEC said.
Also fined were the BoC’s former CEO Andreas Eliades with €140,000; as well as former members of the bank’s risk management committee, Giorgos Georgiades, Andreas Artemis, Costas Severis, and Costas Hadjipapa, who all got €10,000 each.
The BoC incurred huge losses in a 2011 eurozone decision to write down Greek sovereign debt and unexpectedly asked for a state bailout in June 2012. The state, unable to support the BoC and the now-closed Laiki bank, asked for an international bailout that was negotiated by a new government months later, to devastating effect.
Kypri joined the BoC in 1980, and moved up the ladder to hold the position of group chief general manager in 2005. He was appointed deputy group CEO in 2010, and group CEO in July 2012, after Eliades stepped down. During his testimony at the committee of inquiry on the economy, Kypri claimed he took no part in the decision to raise the lender’s Greek bond portfolio. He also distanced himself from reports of being part of a BoC brass “dream team”, a term he disavowed.
SEC has not as yet been notified of any appeals to the fines and SEC head Demetra Kalogerou could not be reached on Tuesday for comment.
