Top Cypriot bankers cited in report
LONDON — Two of the most senior executives at Bank of Cyprus may have deleted crucial email documents last year relating to what proved to be a disastrous decision to invest heavily in Greek government bonds just before Greece’s international bailout in 2010, according to an investigative report commissioned by the central bank of Cyprus.
The report said forensic experts found that the computer belonging to the bank’s former chief executive, Andreas Eliades, who was forced to resign last summer, had “wiping software loaded which is not part of the standard software installations” at the Bank of Cyprus.
Investigators also found such software on the computer of Christakis Patsalides, a senior executive in the bank’s treasury department who, according to the report’s findings, was the mastermind behind the decision to buy the Greek government bonds. Patsalides has also left the bank.
Efforts to reach Eliades and Patsalides late Thursday were not immediately successful. The report said Eliades did not “participate or assist” in the investigation, despite being urged to do so by the bank and its outside lawyers.
The Bank of Cyprus, long considered the better run of the two large banks that have been at the center of the Cypriot bailout debacle, decided to speculate in high-yielding Greek bonds in 2010, just as the Greece government was running out of money.
That decision resulted in the Bank of Cyprus sustaining a loss of 1.9 billion euros, or $2.5 billion, when bond investors were eventually forced to take a 75 percent discount on the value of those bonds under the final terms of the Greek bailout, worked out last year.
That loss, and the larger one absorbed by the other big Cypriot bank, Laiki Bank, in a similarly misguided investment foray, together totaled 4.5 billion euros.