The former president of the parliamentary inquiry into the Vatopedi landswap scandal in Greece hands Cypriot investigators details of the Mr Athos monastery’s involvement in non-perfoming loans which contributed to the collapse of Marfin Popular Bank and subsequent €4bn cost to the Cypriot state
Cyprus Popular Bank branches in Greece have been taken over by Piraeus Bank The loss of €4bn due to the collapse of Marfin Popular Bank and its re-emergence as largely state-owned Laiki Bank in Cyprus has been blamed in part due to non-performing loans from Greece’s Vatopedi monastery.
After a closed-door meeting in Cyprus’ parliament, the president of the committee investigating the country’s near financial collapse and subsequent bailout, Dimitris Syllouris, referred to non-perfmorning loans of the Mt Athos monastery.
“There has to be a very deep and wide investigation because it is indeed a very large scandal, which has cost the Cypriot banking system, and involves monasteries and companies registered in Cyprus,” Syllouris said.
The announcement came after information was handed over by Dimitris Tsironis, a former Greek MP who was president of a preliminary judicial investigation into a multi-million euro landswap scandal involving Vatopedi and the Greek state, to the Cypriot parliamentary inquiry.
Marfin Popular Bank (MPB) was the second-largest banking group in Cyprus, with its shares listed on both the Cypriot and Greek stock exchanges, before it collapsed due to the non-performance of billions of euros of loans handed out primarily to Greek companies just before Greece’s financial crisis.
It was taken over by the Cypriot government in June 2012 – with the Cypriot state taking over 84% of the bank’s equity – and renamed Cyprus Popular Bank (CPB) in Greece, or Laiki Bank in Cyprus.
It is currently being dismantled as part of the “good bank-bad bank” restructuring outlined by Cyprus’ bailout terms, with Piraeus Bank taking over the branches of CPB in Greece and Bank of Cyprus taking over Laiki’s sound assets.
The losses are being written off or offset by a haircut on uninsured bank deposits of over €100,000.
Last year,
a special report by Reuters, headlined ‘How a Greek bank infected Cyprus’, detailed how Marfin Popular Bank was a major lender to the Vatopedi monastery, which received swathes of prime state-owned land across Greecein return for less valuable land that it owned.
Monks at the Vatopedi monastery, in turn, bought shares in Marfin Investment Group (MIG), owned by Andreas Vgenopoulos. That year MIG lost €1.8bn, the biggest ever for a Greek company to that point.
A Greek parliamentary inquiry in 2010 alleged serious “conflicts of interest” in how bank loans were issued to finance MIG’s wider activities.
“A special inquiry on Vatopedi heard the monks spent €30m they borrowed from Marfin bank, the monastery’s biggest lender, to buy shares in the MIG rights issue, plus another €42m in other investment schemes with MIG or its associates,” the Reuters report said.
It added: “The monks were also major players on the stock market and received €109m euros in loans from Marfin bank.”
Tsironis is quoted in the report as saying: “All the loans for shares were granted extraordinarily advantageous terms to the borrowers thanks to the close ties between MIG and Marfin. And it created a special credit risk that should have been spelled out publicly.”
Eleftherotypia
