Co-operative Banks Refuse to Co-operate with Auditor-General Michaelides
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The Co-operative banking sector has refused to give Auditor-General Odysseas Michaelides the information needed to conduct his audit of the banks, lighting up a spat between Finance Minister Haris Georgiades and Attorney-General Costas Clerides over who controls the banks.
In a statement, Clerides said that the Co-ops are state entities and therefore under the auditor-general’s control, contradicting Georgiades’ position that they are private entities.
The situation is confusing; the Co-ops were nationalised as part of a bail-out to save them from bankruptcy in 2013, so technically, the state is the majority owner. Georgiades’ point is that they are actually private entities with a state shareholder and are being monitored by the European Commission is challenged by Clerides, but there are other implications that the legal services may not have thought about. If they are state entities, then the interest charged on a consumer’s accounts may be seen as a form of taxation, and challenged in court in the case that someone takes exception to paying VAT, income tax, social security, municipal taxes, road tax, property tax, AND interest ‘tax’ on top of it all. If they are banks, then they fall under the control of the Cyprus Central Bank, which has a supervisory role and not a strong regulator role like the auditor-general’s office.
It does raise questions about why the Co-ops don’t want to co-operate with Odysseas Michaelides, who is concentrating on the three ‘E’s’ - efficiency, effectiveness and economy. The Co-operative Central Bank is refusing to hand over information about how employees are recruited and advanced in the ranks, and Odysseas Michaelides criticised their practices as being ‘poor’ and ‘provocative.
Perhaps they have something to hide? Transparency doesn’t begin with an ‘E’ but it’s just as important in the banking sector, especially after the outrageous events between 2011 and 2013.
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