Banking system in Cyprus has lost at least 4 billion euros as a result of the merger of Greek banks Marfin Egnatia not acting more Cyprus Popular Bank (Laiki).
According to the newspaper Cyprus Mail, the "scandal" as it is called Greek MP Dimitris Ttsironis became known in 2010 year, during the investigation of another scandal - the machinations of the Monastery of Vatopedi with public lands. Then it turned out that the monks not only used for political support of land in northern Greece, but also to actively play the stock market and got 109 million euro loan from the bank Marfin. This money, in turn, went to buy shares Marfin Investment Group (MIG), which was headed by the former director of Laiki Andreas Vgenopulos.
All this was discussed at a closed meeting of the Cyprus Parliamentary Committee on Ethics, chaired by Dimitris Sillurisa. Following the meeting, he said that "we estimate that in this scheme has been lost at least 4 billion euros." Ttsironis did not name specific names, but said that the scandal involved both private individuals and companies. "I dare say that if it were not so, the Cyprus problem would be much less severe," - he said.
Audit conducted by the central banks of Greece and Cyprus in March 2009 year showed that in July 2007 years Marfin Egnatia issued to individuals and companies loans worth 732 million euros for the purchase of shares of MIG. More 1,8 billion euros received various business associations related to MIG. And the main guarantee of these loans were the shares of the group. The merger of the Greek and Cypriot banks, in turn, has led to the fact that in the summer, with the nationalization of 2012 Laiki Cyprus government was forced to take on the obligations and the Greek part of the group.
However, as shown by an independent investigation of Alvarez and Marsal, from a legal point of view, the Central Bank of Cyprus could not intervene. "The structure of norms and laws is such that, under the Merger Directive, the bank does not need to receive approval from the Central Bank of Cyprus. That is, the bank can transfer assets and liabilities to Cyprus without approval of the Central Bank, "the company's report says. Thus, the Central Bank either had to accept the merger or force the bank to cease operations in Greece. "However, wishing to leave the headquarters of the SRV in Cyprus (due to more favorable business conditions), the Central Bank of Cyprus notified the Bank of Greece of the establishment of the Marfin Popular Bank branch in Greece," concludes Alvarez and Marsal.