SPARKS flew in court yesterday as a former business partner of President Tassos Papadopoulos insisted their law firm had no part in Yugoslav sanctions-busting in the 1990s.
It was the second hearing in a libel case brought by Papadopoulos against the Financial Times for reporting in 2002 that his law firm had close ties with companies suspected of siphoning money abroad.
Papadopoulos himself, his law firm Tassos Papadopoulos & Co, as well as the firm’s partner Nicos Papaesftathiou are suing the Financial Times for £250,000.
According to a report by Morten Torkildsen, an investigator at the United Nations war crimes prosecutor’s office, the Popular Bank of Cyprus allowed a group of Yugoslav-controlled front companies to operate in defiance of UN sanctions.
The report named eight companies in Cyprus which supplied Milosevic’s government with fuel, raw materials, spare parts and weapons to pursue wars in Bosnia in 1992-1996 and in Kosovo in 1998-1999.
All eight ventures were registered on the island as offshore companies by the Tassos Papadopoulos law firm. The same firm acted as legal advisors for the Popular Bank and for Beogradska COBU, the Nicosia-based offshore branch of Beogradska Banka, a state-owned Yugoslav bank.
According to Yugoslav Central Bank officials, as much as $4 billion in foreign currency is thought to have been transferred to Cyprus between 1992 – the year the UN embargo came into force – and 1994. The funds were mainly deposited in the Popular Bank and its Greek subsidiary, the European Popular Bank.
One of the contentious FT articles – published on July 25, 2002 – states that an investigation by the paper “revealed that instead of taking measures against Yugoslav sanctions-busting, leading members of Cyprus’ close-knit elite facilitated the transactions”. The paper alleged these included then Central Bank Governor Afxentis Afxentiou, Kikis Lazarides, at the time chairman of the Popular Bank, and Tassos Papadopoulos.
“We never knowingly violated UN sanctions or engaged in any wrongdoing or unlawful activities,” Pambos Ioannides, now managing partner with Tassos Papadopoulos and Co., said in court yesterday.
He was being cross-examined by the FT’s chief lawyer Pavlos Angelides.
For more than four hours, Ioannides was grilled over his law firm’s connections to Antexol and Browncourt Enterprises Ltd, two offshore companies fingered by The Hague as engaging in sanctions-busting.
Ioannides was one of the directors of Antexol in the early to mid-1990s, something he has not denied.
Antexol was incorporated in 1992 by Tassos Papadopoulos & Co as the nominees. But since it was an offshore company, its real owners or beneficiaries could not be Cypriots. The beneficiaries were named as Yugoslav nationals Ljljana Radenkovic and Radmila Budicin.
“As a professional lawyer, did it not ever occur to you to run a background check on these companies? After all, suspect Yugoslav front companies were all over the news at the time,” challenged the FT lawyer.
“That is not our business. We don’t care about the day-to-day affairs of our clients. If something illegal was going on, we certainly did not know about it,” replied Ioannides.
Angelides then submitted to the court a letter from Ljljana Radenkovic addressed to Ioannides, in which she wrote: “I hereby confirm to you that the shares [of Antexol] belong to Beogradska.”
One of the named beneficial owners of Antexol, Radenkovic had never heard of the company in question, and was subsequently astonished to be contacted by UN investigators.
“Did you tell Mrs Radenkovic that she was a puppet?” queried Angelides.
“Tell us the truth for once, Mr Ioannides. Who was the real owner of Antexol: Mrs Radenkovic or Beogradska Banka?”
The witness said the letter was probably a normal specimen document of internal correspondence, speculating that perhaps it indicated that Antexol’s shareholders had changed in the meantime.
“I aim to show you documents, sir, which you signed personally, where you authorised the deposit and withdrawal of millions of dollars from Antexol’s account,” said Angelides.
“Over my 35-year-long career, our office has dealt with billions of dollars, so that does not impress me,” retorted Ioannides.
He described the FT reports as containing “salacious allegations” aimed at discrediting Papadopoulos at a time he was running for President.
And he said the paper was “in cahoots with blackmailers and other journalists” bent on assassinating Papadopoulos’ reputation.
Tensions rose between Ioannides and Angelides, who began trading banter and loaded remarks about anything from politics to accountability to corruption in public life.
At one point, visibly agitated, the two men accused each other of being “na?ve”, forcing the judge to intervene and appeal for calm, instructing them not to stray from the matter at hand.
The trial continues on May 7.
