By Evie Andreou
A 69-year-old man who was arrested in connection with a number of dodgy loans given by the now-defunct Ayia Fyla cooperative bank, was remanded for four days on Friday.
The Limassol court also renewed for seven more days the remands of the four suspects who were initially arrested in this case, a 54-year-old contractor, a 43-year-old loan manager of the co-op bank and his 40-year-old assistant and a 55-year-old former employee of the bank.
The suspects are allegedly involved in the approval of 22 loans worth €9.5m that were given by the co-op bank between 2006 and 2009 without the required collateral. The irregularities were reported to police in March this year, after the findings of an internal audit at the co-op were forwarded to the Legal Service.
The arrested bank employees and the other suspects were reportedly acting on behalf of the 54-year old contractor, for a fee, securing loans for him and his company with fake collateral, using people with money problems as guarantors. The signatories, who were paid for their services, would agree to sign as guarantors, but the eoduments would later be changed making them primary debtors of the loan without their knowledge.
The court heard that in other cases, they would convince people to secure loans from the co-op to buy land sold by the contractor’s company with reassurances that they would earn a lot in a few years as their market value would increase. It was said in court that the plots in question were valued significantly over the market price and were used to secure bigger loans than their market value, and that the suspects were also presenting fake documents at the land registry department.
The contractor’s 52-year-old driver was also arrested on Thursday and has been remanded for five days. Police is still searching for the whereabouts of two other suspects, 45-year-old Iordanis Kostekoglou, who is believed to have fled to the north, and a 49-year-old female associate of the contractor, who is thought to be abroad.
Ayia Fyla was merged into the Limassol Cooperative Bank as part of last year’s bailout agreement where the government injected €1.5bn into the Cooperative Central Bank and forced many cooperative societies to consolidate and become more efficient.
