Cyprus’ President-related company transfers €21mn to London prior to bailout agreement – report
A company owned by in-laws of Cypriot President Nicos Anastasiades wired €21 million from Laiki Bank to London days before the Eurogroup’s crisis-triggering levy proposal, claims a Cypriot newspaper. The president demands an investigation.
During two days, 12 and 13 of March, the company A.Loutsios
& Sons Ltd., co-owned by Loutsios John, the husband of Nikos
Anastasiadis’ daughter, Elsa, took five promissory notes worth €21
million from Laiki Bank. The money was then transferred to London,
reported Cypriot newspaper Haravgi, affiliated to the
communist-rooted AKEL party.
The withdrawal was fulfilled just three days before the
Eurogroup meeting when euro finance ministers agreed a 10 billion
euro ($13 billion) bailout for Cyprus.
The company, however, has firmly denied the reports.
The newspaper recalls that Cyprus Finance Minister, Michalis
Sarris, publically admitted that the government was aware in
advance about the Eurogroup’s intentions to impose a “haircut” on
bank deposits of more than 100,000 euros.
Spokesman of AKEL, Stavros Evagorou, has called on the
investigation committee to check the information regarding money
withdrawal by Anastasiades’ family members as well as other reports
about money transfer from the country on the eve of the Eurogroups’
Responding to the allegations, President Anastasiades called the
publication an “attempt to defame companies or people linked to
“[This] is nothing but an attempt to distract people from the
liability of those who led the country to a state of
bankruptcy,” Anastasiades said.
The president stressed that no one, including himself, will walk
free from the on-going investigations looking into responsibility
for the crisis that has engulfed the Cypriot economy.
Moreover, Anastasiades assured that when the investigative committee assembled on Tuesday, he would request that its members look into this particular case.
Earlier in March the Eurogroup proposed the Cypriot government impose a new tax that would make citizens shoulder a 12.5-percent crisis tax on savings larger than €100,000, with a tax of 3 percent on smaller deposits.
The initial agreement suggested 9.9 and 6.7 percent levies on
deposits above and below the €100,000 threshold
At dawn of March 25, Cyprus and the troika of international backers (EU, ECB, IMF) reached agreement on a €10bn bailout plan, aimed at preventing the bankruptcy of the island’s financial system and the country’s exit from the Eurozone.
The depositors holding over 100,000 euros at the Bank of Cyprus will lose 37.5 per cent in money in exchange for bank shares. These big depositors may further lose up to 22.5 per cent more if the experts consider bank’s balance insufficient.
This means that those with big deposits in Cyprus’ largest bank
could lose could lose up to 60 percent of their savings in a harsh new
EU and IMF bailout deal. Those with deposits less than 100,000
euros will be protected under the Cyprus deposit guarantee.
At the same time, under the bailout deal between the eurozone
finance ministers and Cyprus, the country’s second largest bank
Laiki will effectively be shut down in order to set up a "good
bank" and a "bad bank".
Deposits below €100,000 will be shifted from Laiki to the Bank
of Cyprus to create a “good bank.” Deposits larger than €100,000,
which are not guaranteed under EU law, will be frozen and used to
The agreement caused mass outrage among Cypriots.