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Vgenopoulos leaves Cyprus unmerciful and unwanted

24 January 2012 / 18:01:22  GRReporter
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The former president of Marfin Popular Bank Public Co Ltd Andreas Vgenopoulos left the Cypriot banking system as an unwanted outcast. He is still a major shareholder of the bank, but not its president after his clash with the Governor of the Central Bank of Cyprus Athanasios Orphanides. The main problem between the two parties had already started back in 2009, when the supervisory authority in Cyprus had questioned some loans of the bank to certain customers in Greece. And Mr. MIG disagrees with this statement. With the deepening debt crisis in Europe, the Cypriot government made it clear that the burden of bank recapitalization should be borne by major shareholders of the financial institutions, which has only exacerbated the clash between Vgenopoulos and the number one banker in Cyprus. The result was a change in the management of Marfin in late 2011.

"I do not leave the ring in Cyprus defeated... I will leave either a winner or dead. I have never left from the back door," Vgenopoulos commented on the Cypriot interbank drama for Stigma TV some time ago.

There are different scenarios for the rift between Vgenopoulos and the Central Bank of Cyprus, reads an article in Vima, but the turning point is considered the banker’s proposal made in May 2009 to move Marfin headquarters from Cyprus to Greece. It has never been fulfilled.

One version is that Vgenopoulos considered about three years ago that the banking system of Cyprus was hampering him from fully developing investment opportunities, which turned the balance to returning the headquarters to Athens. The second version is that he sought to take advantage of the Greek system of bank recapitalization at that time, as he had benefited from the favourable legal framework of Cyprus in 2006 in the merger of Marfin Bank and Laiki Bank. The third version assumes that the request to transfer the bank headquarters from Cyprus to Greece was a bluff in order to obtain greater scope for action on the large island.

Whatever Vgenopoulos’ motives, Orphanides was not willing for Cyprus to be "seduced and abandoned" by the president of Marfin and his moving of the bank headquarters any time he considers things were not in his interests. Athanasios Orphanides is known in Cyprus as a determined and focused banker. He is not only a board member of the European Central Bank, but in the past he was also not afraid to enter into confrontation with the men of the day – the former President of Cyprus Demetris Christofias and Minister of Finance Charilaos Stavrakis. Moreover, the Central Bank of Cyprus was worried about the response of other shareholders, who had not always been inspired by the decisions of the Athenian government.  

To gain positions, Vgenopoulos took advantage of all the opportunities that Cyprus offers to distribute his investment ideas. He met with the President, members of the Council of Ministers, even spoke to the Cypriot Parliament. He believes the main reason for the unfavourable economic situation of Cyprus is the high rate of exposure of the banking system to Greek government bonds. For a long period of time, the general mood in the country was that the banker represented a promising new generation of financiers. It seems that this opinion was not fully shared by Athanasios Orphanides and some of the other shareholders of Marfin, like Lanitis family, who had suspicions that not everything in the bank was under control. Some large investment loans that Marfin had granted to Greece were brought to their attention and clashes with the Finance Supervision Committee on the merger of the bank with Egnatia and Laiki were not lacking either. To defend himself before "leaving," Vgenopoulos called the Central Bank of Cyprus to invite BlackRock to make an inspection to ensure that Marfin has no bad loans. Analysts note that the major shareholder doubts about some deals have made first Vgenopoulos resign from the presidency and then, the manager for Greece Iraklis Koundaris and the board member Evtimii Bouloutas to follow him and resign.

The change of the guard in Marfin is already a fact and Christos Stylianides and Panayiotis Kounnis have taken over the management of the bank. They are close to the former president of Laiki Bank Kikis Lazaridis, who was excluded from the management after Marfin acquired the institution. Former Minister of Finance Michalis Sarris has been appointed president of the bank. Greek journalists describe him as a respectable economist and take the opportunity to note that he is familiar with the activities of offshore companies, and that he was arrested at a gay party held in the occupied areas of Cyprus. It is not yet clear which route the financial institution will take but people say, "New management, new luck."

Tags: EconomyCompaniesFinanceMarfinVgenopoulosCyprus
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