FBME Bank, the Cyprus arm of the Tanzania-based lender whose license was revoked by the Central Bank of Cyprus last week, on the grounds of alleged money laundering, has lashed out at the government in an open letter to the President, challenging his neutrality on the matter and alleging in turn a dose of corruption on the part of CBC officials who seem to be [pandering to US government officials.
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The open letter, signed by FBME Chairman Ayoub-Farid Saab, said that after 17 months of the CBC’s mismanagement of this branch, during which time the CBC also closed the subsidiary FBME Card Services, and has denied access by ordinary depositors to their own accounts.
Now, Saab said, the livelihood of a further 250 of the bank’s employees is under grave threat while the CBC continues its efforts to send the bank to its grave. Thi follows the incompetence the CBC has shown in actions with Cyprus’ three systemic banks, all also under its suprvision and regulation.
“It is our contention that a small group of CBC officials, possibly colluding with outsiders, have made a sacrificial offering of FBME to a USA government agency completely without justification,” Saab wrote.
The CBC announced on Monday, December 21, that it had revoked the banking operation license of the Cyprus branch of FBME Bank, ending a long dispute over the Tanzania-based bank’s suspected dealing with money laundering, according to the US Treasury conclusions.
But the bank, which had already contested the CBC’s suspension and appealed to the Paris-based International Chamber of Commerce, responded with a statement saying that it will launch a legal fight against the “unfounded CBC license revocation.”
“FBME Limited has announced that immediate legal action is being launched to contest the revocation by the Central Bank of Cyprus (CBC) of FBME Bank’s license for its branch in Cyprus and is challenging this Decision in front of Cyprus Courts,” it said last week.
“The revocation, communicated in a nine-page declaration, blames others for actions caused and taken by the CBC Board over the past 17 months, which stem from CBC’s unilateral takeover and attempted sale of FBME Bank’s branch in Cyprus. FBME rejects this Revocation of Licence in its entirety.”
“CBC’s illegal measures against FBME, of which this is the latest, have led to lawsuits in Cyprus and abroad, exposing the Cyprus authorities to a spiral of claims for substantial damages and compensation.”
In another announcement last week, the FBME said “it is clear that the real guilty parties are a small coterie of CBC officials and some shadowy figures external to the organisation. There is very little doubt that they had prior knowledge of the original measures to be taken by the US government agency FinCEN against FBME and probably colluded in their preparation.
“Now that the US courts are questioning the FinCEN measures and have ordered that these be re-examined, the CBC is being exposed. Similarly, the decision of the international arbitration tribunal at the ICC in Paris to consider the claims of the plaintiffs, the beneficial owners of FBME, in respect to damages and compensation against the Republic of Cyprus, brings even more risk to those around the table who concocted this episode in the first place. Financial penalties will be directed at the Republic of Cyprus, and the country’s taxpayers and their elected representatives will demand to know who has caused this calamity.”
In an earlier open letter also addressed to the President of the Republic, former Attorney General Alekos Markides, acting on behalf of the owners of FBME Bank, outlined the series of legal victories FBME has secured in overseas courts and argued that it is the Republic as the state that shall be left liable and exposed and not the Central Bank of Cyprus as an independent institution.
Markides argued that in the case of FBME the Central Bank’s has acted as Resolution Authority and therefore not in its role as an independent institution of the Republic.
This in effect leaves the State at risk of having to pay compensation described as a “huge sum” at the expense of the tax payer. The Resolution Authority, claimed Markides, has failed to sell the bank and has been acting arbitrarily and illegally and in a manner aimed at covering up its responsibilities, more recently by planning to liquidate the bank. This, he added, is a prospect that will have further devastating effects on all concerned.”
In August, the US agency FinCEN, on the basis of whose now disputed findings FBME was placed under administration, had to re-open its period for assembling and assessing evidence to late January 2016 after a US court halted its attempt to impose its Final Rule on FBME Bank.
Markides concluded by calling on the President to convene and chair a meeting with the Minister of Finance, the Resolution Authority and the beneficiaries of FBME Bank so as to discuss the prospect of finding constructive solutions to safeguard the interests of all concerned.
