After two years of work, a federal investigation into mysterious bank transfers may have found evidence that links Focus Maritime, owned by shipping executive Michael Zolotas, to Andreas Vgenopoulos, the former head of Cyprus’ now-defunct Marfin-Laiki Bank.
Cypriot police and foreign experts have been investigating factors that contributed to Cyprus’ financial collapse, and have handed over their findings in a report to the country’s attorney-general Costas Clerides, according to Cypriot paper Politis.
In July 2007, Zolatas’ Marshall Islands-registered company Focus Maritime paid €1m to a bank account controlled by Christodoulos Christodoulou, two months after he had stepped down as governor of the Central Bank of Cyprus.
Christodoulou had approved the sale of HSBC’s stake in Marfin-Laiki to Andreas Vgenopoulos in February the previous year – effectively giving Vgenopoulos full control over the bank, Politis reports.
Focus’ €1m payment was paid into the account of Christodoulou’s daughter’s company AC Christodoulou Consultants. In court, he justified the transfer as “consultancy services for 10 years, paid in advance” and in 2014 served five months in prison for failing to pay tax on the amount received.
The investigators’ report has not been released publicly, but an anonymous source familiar with document told Politis it shows any claim that AC Christodoulou Consultants provided consultancy services to Focus Maritime is false. “Behind Focus was Andreas Vgenopoulos and the money given to him,” the source told the paper.
Politis reveals an anecdotal report included in the investigation said Marfin-Laiki had sent warning letters to a creditor that was overdue on repayments of a small loan of between €3,000 to €4,000. Vgenopoulos himself made a phone call to the unnamed creditor, a Cypriot national, assuring him that “we take care of our associates”. Later, the loan was repaid in full by Focus Maritime.
Vgenopoulos has previously admitted to having met Zolotas a handful of times, being co-directors of certain companies, but has vehemently denied having a close relationship with him.
Zolotas is the vice-chairman, president and CEO of Focus Maritime, and is also the chairman and CEO of shipping company NewLead Holdings, in which Focus holds around 265m shares.
In 2007, Zolotas participated in raising $5.2bn in capital for MIG, an investment group headed by Vgenopoulos. Reports say Zolotas used funds loaned to him by Marfin-Laiki bank (as it was then known), collateralised by the MIG shares bought. Vgenopoulos has always denied the claims.
Politis reports that Focus Maritime received a total of €286m in loans from Marfin-Laiki Bank, collateralised by a mere €1.8m.
In late 2007 and early 2008, Focus allegedly donated €1.5m to Cypriot political party AKEL and €500,000 to the DISY party, according to reports in the Cypriot press.