The need for the state as the principal owner of the Cooperative to exercise strict control and supervision as regards its operation was emphasized at today's meeting of the Parliamentary Committee on institutions.
MPs were very critical and requested explanations in relation to complaints concerning the administrative procedures at the Cooperative.
The committee examined observations included in the annual report of the Auditor General and allegations expressed by ETYK in a circular issued last November.
Committee members stressed the need for comprehensive supervision at the Cooperative and described the fact that the state does not exercise the necessary control, as unacceptable.
Representatives of Cooperatives defended their positions highlighting efforts to address non-performing loans.
The president of the committee on institutions and EDEK MP Nicos Nicolaides, in his statements following the meeting of the Committee, pointed out that the circular refers to dozens of non-transparent recruitments.
"The Auditor General's report also confirms possible irregularities on four issues relating to non-performing loans, the appointment of the Executive Director, staff and criminal and disciplinary offenses" as he noted.
"The Cooperative is now the only Cypriot bank as regards its ownership status and no one has the right, whether it is the government, or the management, to put its survival in danger. The institutions and the parliament in particular, will ensure the survival of the Cooperative" said Mr. Nikolaides, noting that the discussion will continue at another meeting of the committee.
"Our goal is to send the message that there must be control," he said and referred to a "disappointing statement by the representative of the Ministry of Finance who said more or less, that the Finance Ministry is unable to exercise control".
AKEL MP Aristos Damianos said that "apart from the reprehensible absence of CB from the meeting, we are concerned about what was reported by the representative of the Ministry of Finance, as the major shareholder of the Cooperative, that decisions are taken by the CB. We are concerned and we will demand that the CB attends the committee", he said.
The position of the auditor and the Cooperative
In his statement during the meeting, the Auditor General stressed that the report of the single supervision mechanism should be submitted by the Central Bank, noting that he will make a formal request for it even though the CB does not provide enforcement tools in case there is a refusal for its submission.
Representatives of the Cooperative, who were assured that they will have enough time to express their positions at a new meeting, answered on each of the four issues referred in the observations of the Auditor General.
As regards the issue of the management of NPLs they referred to the performance of the Cooperative on the four targets set by the CB.
It was noted that € 1 bn of NPLs have been restructured in 2015 while another € 1,5 bn of NPLs are expected to be restructured in 2016.
As regards staff issues, it was noted that there have been 500 internal transfers from existing staff and 81 recruitments, which, as argued, confirms that the existing staff has been fully utilized.
Allegations of irregular recruitments were not supported, according to DISY MP Andreas Kyprianou, particularly with regard to allegations of interference from political parties.
The representative of ETYK admitted that these reports cannot be documented but they are based on ETYK’s information.
As regards the appointment of Nicolas Chatzigiannis at the post of the Director General, a representative of the Cooperative said that it happened under the pressure of time, in order not to leave the Cooperative headless and it was based on procedures followed for the appointment of the previous general manager. It was also stressed that the view of the guardianship agreed with the view of the SSM as regards Mr. Chatzigiannis .
The representative of the 1% of shareholders in the Cooperative, of SY.K.E.SY., reported on the performance of the Cooperative, stressing that the Cooperative is subject to great scrutiny while suggesting that both the EU and internal factors conspire against the Cooperative.
Mr. Syllouris said that the important thing is for the report of the single supervisory mechanism to come to the Parliament and to the Auditor General, as it involves issues that need to be addressed before it is too late.
"The report is necessary and useful in order to see the comments included and take actions, even after the approval of the €200 mn support to the cooperative" he said, adding that support to the cooperative does not mean to applaud, but to implement strict control.
MPs were very critical and requested explanations in relation to complaints concerning the administrative procedures at the Cooperative.
The committee examined observations included in the annual report of the Auditor General and allegations expressed by ETYK in a circular issued last November.
Committee members stressed the need for comprehensive supervision at the Cooperative and described the fact that the state does not exercise the necessary control, as unacceptable.
Representatives of Cooperatives defended their positions highlighting efforts to address non-performing loans.
The president of the committee on institutions and EDEK MP Nicos Nicolaides, in his statements following the meeting of the Committee, pointed out that the circular refers to dozens of non-transparent recruitments.
"The Auditor General's report also confirms possible irregularities on four issues relating to non-performing loans, the appointment of the Executive Director, staff and criminal and disciplinary offenses" as he noted.
"The Cooperative is now the only Cypriot bank as regards its ownership status and no one has the right, whether it is the government, or the management, to put its survival in danger. The institutions and the parliament in particular, will ensure the survival of the Cooperative" said Mr. Nikolaides, noting that the discussion will continue at another meeting of the committee.
"Our goal is to send the message that there must be control," he said and referred to a "disappointing statement by the representative of the Ministry of Finance who said more or less, that the Finance Ministry is unable to exercise control".
AKEL MP Aristos Damianos said that "apart from the reprehensible absence of CB from the meeting, we are concerned about what was reported by the representative of the Ministry of Finance, as the major shareholder of the Cooperative, that decisions are taken by the CB. We are concerned and we will demand that the CB attends the committee", he said.
The position of the auditor and the Cooperative
In his statement during the meeting, the Auditor General stressed that the report of the single supervision mechanism should be submitted by the Central Bank, noting that he will make a formal request for it even though the CB does not provide enforcement tools in case there is a refusal for its submission.
Representatives of the Cooperative, who were assured that they will have enough time to express their positions at a new meeting, answered on each of the four issues referred in the observations of the Auditor General.
As regards the issue of the management of NPLs they referred to the performance of the Cooperative on the four targets set by the CB.
It was noted that € 1 bn of NPLs have been restructured in 2015 while another € 1,5 bn of NPLs are expected to be restructured in 2016.
As regards staff issues, it was noted that there have been 500 internal transfers from existing staff and 81 recruitments, which, as argued, confirms that the existing staff has been fully utilized.
Allegations of irregular recruitments were not supported, according to DISY MP Andreas Kyprianou, particularly with regard to allegations of interference from political parties.
The representative of ETYK admitted that these reports cannot be documented but they are based on ETYK’s information.
As regards the appointment of Nicolas Chatzigiannis at the post of the Director General, a representative of the Cooperative said that it happened under the pressure of time, in order not to leave the Cooperative headless and it was based on procedures followed for the appointment of the previous general manager. It was also stressed that the view of the guardianship agreed with the view of the SSM as regards Mr. Chatzigiannis .
The representative of the 1% of shareholders in the Cooperative, of SY.K.E.SY., reported on the performance of the Cooperative, stressing that the Cooperative is subject to great scrutiny while suggesting that both the EU and internal factors conspire against the Cooperative.
Mr. Syllouris said that the important thing is for the report of the single supervisory mechanism to come to the Parliament and to the Auditor General, as it involves issues that need to be addressed before it is too late.
"The report is necessary and useful in order to see the comments included and take actions, even after the approval of the €200 mn support to the cooperative" he said, adding that support to the cooperative does not mean to applaud, but to implement strict control.
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