The Bank of Cyprus (BoC) has lent its full support to three members of its upper management team who have been indicted, along with former top executives, in relation to the reclassification of the bank’s Greek government bond holdings.
In a statement, the bank’s board added that the events in question have already been disclosed to the market.
Earlier this week, the attorney-general (AG) filed the court case, the third so far involving BoC officials.
Three of the accused individuals are still with the bank. They are: deputy chief executive officer and chief operating officer Christodoulos Patsalides, finance director Eliza Livadiotou, and group treasurer Despina Kyriakidou.
The other defendants are former CEOs Andreas Eliades and Yiannis Kypri, former finance division chief Christis Hadjimitsis and former risk management boss Nicolas Karydas.
They face a total of 18 charges relating to market manipulation, conspiracy, forgery and circulation of a forged document, from 2010 to 2014.
Hearings will start on February 16.
Eliades and Kypri are also defendants in the other two court cases.
In its statement, the bank said: “The persons concerned deny any wrongdoing on their part and will continue to carry out their existing duties. No proceedings were instituted against Bank of Cyprus Holdings, the bank or any other member of the group.”
It went on to say the board was “fully supportive of the three individuals involved” and the bank would continue monitoring the proceedings closely, adding that it may also make further announcements “as appropriate”.
It’s understood the defendants are charged with conspiring to reclassify the bank’s holdings in Greek government bonds – with an effective date of April 1, 2010 – with intent to defraud investors.
The bonds were reclassified in a manner as to indicate the bank had suffered fewer losses than it actually did, conveying a better picture overall of the lender’s financials.
In turn, this resulted in the stock value being listed higher than it would otherwise have been – a move which the attorney-general’s office believes is tantamount to market manipulation.
The forgery charge relates to the minutes of a meeting of the BoC Group’s Assets and Liabilities Committee (ALCO) of April 7, 2010.
The AG believes the date on the document was altered.
Unlike the first two cases filed against former officials – and the bank itself – which were based on reports by the Cyprus Securities and Exchange Commission, this one was based on a report by the lender’s own internal audit unit.
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