Insider Business 'Plunder' at the co-op

‘Plunder’ at the co-op

Years of ‘plunder’ at the co-op, including dodgy loans and inflated collateral have contributed to the creation of non-performing loans of €7.5 billion, Phileleftheros reported on Thursday.

On Wednesday, attorney general Costas Clerides announced that he would appoint a committee of inquiry on the Cyprus Co-operative Bank.

And President Nicos Anastasiades requested that such a committee of inquiry bring in foreign experts to probe all aspects of the operation of the co-op credit system, the Co-operative Central Bank and the Cyprus Co-operative Bank.

On Tuesday the European Commission approved Cyprus’ measures to facilitate the liquidation of the CCB under national law. These involve the sale of some CCB assets and deposits to Hellenic Bank.

The government approved the CCB deal, following an offer submitted by the Hellenic Bank to buy out the ‘good part’ of the bank.

The decision has raised a storm of protests, with Opposition parties accusing the government of a sell-out and of mismanagement. AKEL has been especially critical, with its leader Andros Kyprianou saying on Wednesday that the government had effectively closed the CCB and shifted the burden to the tax payer.

Among the examples cited by Phileleftheros is that of a large Nicosia co-op which approved loans of €60m with inflated valuations of the collateral made by only one property valuer for which in 2015 the co-op had to make provisions of  €40m.

Other cases involved loans given to associations, even though this was illegal. The loans were due to be repaid by grants the local co-ops would give these associations every year.

Another example is that of a co-op which temporarily ‘amended’ its books to show profits so as to issue a grant of €1m to a specific association, and then changed them back to reflect the true picture.

The newspaper said there were also cases of individuals with links to politicians and candidates receiving loans without collateral, and these loans are now non–performing.

Moreover, a loan of  €200,000 was given to a young woman with health problems who was not in a position to sign the contract, and her finger prints were used instead. The loan was never repaid and with interest and penalties now stands at €900,000.

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