Cyprus Freezes Billions in Former Laiki Chiefs' Assets

Court orders were issued on Friday freezing more than five billion euros in assets of three Greek former executives of the island's now defunct Laiki Bank, the Cyprus central bank said.

It said the special administrator of Laiki Bank, Andri Antoniades, has obtained interim orders against Andreas Vgenopoulos, Efthimios Bouloutas, Kyriakos Magiras and Marfin Investment Group Holdings.

The orders, issued by Nicosia District Court, have already been served, the bank said in a statement.

"They consist of imperative orders for the global freezing of assets totaling EUR3.79 billion against Messrs Vgenopoulos and Bouloutas and EUR1.5 billion against Mr Magiras," said the central bank.

"They also include orders for the disclosure of all the assets of the three aforementioned individuals as well as orders prohibiting Marfin Investment Group Holdings from making any payment or transfer in favor of the three aforementioned individuals," it added.

The central bank did not elaborate on the reason for the assets freeze.

Bouloutas is a former Laiki CEO, while the other two are also former senior board members of the bank that crashed after its exposure to Greek debt was a key reason for Cyprus applying for a bail-out last year.

Greek businessman Vgenopoulos issued a statement on Friday saying he would contest the order -- which he said had no validity outside Cyprus -- on June 11.

Greece's Marfin Investment Group, which Vgenopoulos heads, said it was taking legal action of its own against the Cyprus government, claiming 828 million euros ($1.07 billion) in its lost investment in Laiki.

Efforts by Agence France Presse in Greece to secure further comment by those named were unsuccessful.

In a deal struck in March with international lenders, the cost of the Cyprus bail-out ballooned to 23 billion euros that included a bail-in from uninsured depositors.

Cyprus was forced to wind up failed lender Laiki and impose a massive levy on larger deposits in the Bank of Cyprus (BoC), the island's largest.

BoC customers with deposits of more than 100,000 euros could lose up to 60 percent of those holdings.

Those in Laiki will have to wait years to see any of their money over 100,000 euros, after it was split into a good bank and bad bank -- the good part being absorbed by BoC.

The unprecedented eurozone "haircut" on deposits forced the government to close all of the island's banks for nearly two weeks in March and impose draconian controls when they reopened.

Critics say that the island's second largest lender overreached itself when it merged with Greece's Marfin Egnatia bank in 2006, triggering an over ambitious expansion project in Greece, Russia and the Balkans.