President warned over possible compensation for FBME

Cyprus could pay a “huge sum” of money in compensation to FBME because the Central Bank has failed to act as an independent institution, former Attorney-general Alekos Markides told President Nicos Anastasiades on Monday.

In an open letter to the president, Markides, on behalf of FBME bank owners Ayoub-Farid Michel Saab and Fadi Michel Saab, said the republic was at risk over “mishandling” the FBME case.

According to the former AG, in handling the FBME case the “Central Bank has acted as a resolution authority and therefore not in its role as an independent institution of the Republic,” putting Cyprus at risk of having to pay “a huge sum” of compensation at the expense of the tax payer.

He claimed the resolution authority “failed to sell the bank and has been acting arbitrarily and illegally and in a manner aimed at covering up its responsibilities, more recently by planning to liquidate the bank.”

Stressing FBME has obtained a series of legal victories in overseas courts, Makrides said it would be the state that would be left liable and exposed and not the Central Bank as an independent institution.

He called on Anastasiades to hold a meeting with the minister of finance, the resolution authority and FBME’s beneficiaries to discuss constructive solutions “to safeguard the interests of all concerned”.

Last week the Central Bank of Cyprus imposed a €1.2m fine to the bank for not complying anti-money laundering legislation and the prevention of financing of terrorism.

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