Georgiades, AG Clerides engage in war of words over Coops audit (Update-2)


(Updates with fresh AG reaction in third and eleventh paragraph)

By Stelios Orphanides

The comments made by finance minister Harris Georgiades on Tuesday on the interpretation of legislation on the administrative audit of the cooperative banking sector angered Attorney-general Costas Clerides who accused the minister of contempt of the opinion issued by the AG’s office, as the standoff between the minister and the audit office continued.

Clerides said that the finance minister continued to consider the Cooperative Central Bank, into which the government injected almost €1.7bn since 2014 and owns 99 per cent of its shares, as a non-state-owned enterprise “despite the relevant opinions of the Republic’s attorney-general” that it is indeed a state-owned company as stipulated by the fiscal responsibility and fiscal framework law of 2014, Clerides said in a statement on the website of the Press and Information Office on Tuesday.

The AG’s statement prompted Georgiades to respond in public which in turn triggered a new public reaction by Clerides.

“With your comments today you had showed contempt for the Law Office’s and the AG’s opinions, by saying that there are often different interpretations of the law,” Clerides said. The AG added that when the interviewing CyBC radio anchor argued that the Law Office already interpreted the law, “you replied that there are courts which interpret laws”.

Georgiades wants to bar Auditor-general Odysseas Michaelides from auditing the Cooperative Central Bank citing the need for flexibility dictated by competitive market conditions. He said a few hours earlier that the legislation passed by the parliament could be subject to interpretation. “There are courts which ultimately interpret whether something is legal or not,” the minister had said.

Clerides said that Georgiades’s comments completely defy “constitutional provisions” according to which the Republic’s Law Office and the AG are the legal counsellors of ministers and their opinions have to be respected and applied by government agencies. In addition, three private law firms advising the Cooperative Central Bank opined in February that Cyprus’s second largest lender is indeed a state-owned enterprise as a result, the provisions of the legislation do apply in its case, Clerides said.

While the standoff between Georgiades and the audit office threatens to seriously damage the image of the finance minister who is given credit for steering Cyprus out of the 2013 crisis and helping the economy back to growth earlier than expected, the minister responded to Clerides’s letter by sending him a written response which was also given to the media.

“Your position that anyone’s right to resort to justice constitutes contempt of your Office’s opinions, surprises me,” the minister was quoted as saying by the Cyprus News Agency.

The opinion in question, Georgiades continued in his letter, “was not even forwarded to the finance ministry” and added that it had to ask the AG’s office to receive a copy.

The terms under which the Cooperative Central Bank received financial assistance, “necessitate the state’s non-involvement in the organisation’s unimpeded operation,” Georgiades said. “That you have issued an opinion based on which the cooperative banks has to be considered and operate as a state organisation, is exactly the essence of the issue which emerged and therefore the amendment of the legislation may be necessary, something which is an inalienable right of the legislative”.

Clerides responded to Georgiades’s letter in a public statement in which he said that he had not forwarded his opinion to the ministry of finance because it was the Cooperative Central Bank which had requested it. “As soon as the minister asked for a copy, I sent (one) at once,” the AG said. “It would be best for the minister to advise the cooperative bank’s leadership to comply with the provisions of the legislation as it stands now instead of disputing opinions of the state’s legal advisors and encourage those affected to consider the possibility of resorting to the justice”.

Earlier, auditors from Michaelides’s agency who attempted on Tuesday to enter the premises of the Cooperative Bank were not admitted – after being prevented from doing so on October 26 -, the audit office said in a statement. Michaelides said on various occasions that the procedure applied when the bank appointed its former chairman Nicholas Hadjiyiannis as chief executive officer was questionable.

“As the AG opined, the Republic’s auditor-general has all the rights, powers and obligations” like in the case of all organisations he audits, the audit office statement said.

“The Cooperative Central Bank’s financial audit is already carried out by a private audit company,” which the bank appointed, and the audit office is ready to provide its approval a posteriori, the government auditors said adding that their work will be “an administrative audit which includes a compliance audit” and not the bank’s supervision.
The European Central Bank’s Single Supervisory Mechanism together with the Central Bank of Cyprus supervises the Cooperative Central Bank since 2014.


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Stelios Orphanides is a journalist at To contact Stelios Orphanides: [email protected]

  • Barry White

    Wrong Haris, time to move on.

    The Coop has been a corrupt cess pit of political jobs and favours, bribes and backhanders and illicit deals. Since the Tof declared that the AKEL cookie jar was sound and needed No bail in or bail out it has sucked € 1.7 billion of tax payers money and is “owned” 99% by the state.

    It is a broke abatoir holding paddock for overpaid political hacks of limited ability and even less ambition. NPL’s up to and higher than the roof.

    Let Odysseas lift the sewer manhole cover. Then close the place down. Cheaper for the taxpayer than allowing it to carry on.

  • alexander reutersward

    There must be so many things hidden in the bank that most likely would make the troika and the ecb wonder how they ever could trust anything from a Cypriot bank or government

    • Mist

      I was just thinking along the same lines, “what cracks has Harris been papering over?”

      • Slomi

        me too.

  • John Henry

    If the FinMin said something that actually woke the ever sleeping AG from his stupor, I can’t help but think that the FinMin must have spoke the truth.

  • Bernard Smart

    Oh dear Harris what could u possibly be afraid of ??
    Too many political favors not yet covered up??

    • disqus_ZPlOdQqScB


  • disqus_ZPlOdQqScB

    Oh dear indeed – this just confirms what most believe! huge dodgy dealings! just waiting to be uncovered. Up to now we have come to expect more from Harris so what is he hiding (or being forced to try to hide?)