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CYPRUS: Highly-paid FBME bank administrator quits.

The Central Bank of Cyprus, acting as the Resolution Authority that took control of Tanzania-owned FBME Bank in Cyprus over alleged money laundering charges, announced on Friday that Special Administrator Dinos Christofides resigned "for personal reasons", effective Saturday, May 16.

The Central Bank had last month appointed UK-based recoveries expert Andrew Andronicou as a second Special Administrator, who will now take full charge of the bank at a reportedly monthly expense of EUR 50,000.

The monthly fee, in addition to a 20% mark-up for expenses, also allows Andronicou to hire up to four consultants to help administer the bank. He was previously called in to try and recover assets from bankrupt Orphanides Supermarkets, the island's largest retailer prior to its collapse almost two years ago.

Christofides was reportedly earning EUR 10,000 a month. Payments are deducted from FBME deposits, currently controlled by the Central Bank, with some EUR 270 mln placed in escrow with the Bank of Cyprus, widely rumoured in the past as the potential buyer of the Tanzania-based bank's local branch.

Although staff at the administered bank have often complained that Christofides was not at all cooperative, resulting in clients' accounts being blocked and transactions trickling through, the hope is that Andronicou will at least try and bring the bank closer to normal operations, prior to its suspension last July.

The Central Bank had intervened after the US Department of Treasury's Financial Crimes Enforcement Network (FinCEN) named FBME as "a financial institution of primary money laundering concern". To this day, the FBME shareholders deny the allegations and resorted to the Paris-based ICC arbitration court to have the liquidation and resolution orders lifted.

FBME's shareholders asked the ICC Tribunal to settle the dispute before irretrievable damage is caused to the bank branch by the Central Bank of Cyprus, the Resolution Authority and the appointed Special Administrator and are seeking compensation for damages of at least $500 mln.

The whole case has also dealt a serious blow to the credibility of the Cyprus authorities that are struggling to save face and rebuild the banking sector after its near-meltdown in 2013, resulting in Laiki Bank shutting down and its depositors losing their savings, with the operations and debt were carried over to Bank of Cyprus, the island's biggest lender, burdened with some EUR 11.5 bln in ECB-alloted emergency liquidity allowance (ELA).

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Publication:Financial Mirror (Cyprus)
Geographic Code:4EXCY
Date:May 15, 2015
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