The discharge of a person with intellectual disability from the loans he took out with former CPC, decided the Financial Commissioner Paul Ioannou, in a final decision dated 26 May. As he states in a note he circulated, the complaint was submitted by an authorised representative of a person with a fully established intellectual disability.
As he states in his final decision, the complainant had obtained two loans from the former Strovolos SPC, which have now been transferred to KEDIPES.
In an interim decision of 18 November 2021, the Commissioner called on KEDIPES to proceed immediately and without any further delay to cancel a planned divestment procedure in a final and irrevocable manner. KEDIPES complied and proceeded to cancel the auction proceedings, it added.
In the conclusions of its final decision, issued on 26 May 2022, the Commissioner calls on KEDIPES to "release the Complainant, in full and in full, from any claim it may have on the disputed loans", which it is required to write off in full. Apparently, because of this, he notes, all of the Complainant's mortgaged properties securing the disputed loans are discharged.
According to medical certificates, it appears that the Complainant had already been diagnosed since 1979 as a person with a low level of intelligence, the Commissioner says. Therefore, both at the time of applying for and signing the loan agreements under discussion and after they were granted, he was not able to understand what he was signing and neither did he have or has the capacity to repay the said loans. Therefore, no payment of any instalment has been observed to date, he says. In addition, a certificate dated 23/04/2018, demonstrates validation of the complainant's registration in the Register B of the Commission for the Protection of Persons with Intellectual Disabilities, in accordance with the provisions of the Persons with Intellectual Disabilities Act 1989.
From this, according to the Commissioner, it is clear that the complainant did not have the capacity to contract lawfully because he does not meet the requirements of Articles 11 and 12 of Cap. 149. Article 12 of Ch. 149, which is entirely relevant to the interpretation of the term "sane contractor", states that a contractor at the time of its formation is sane if he is able to understand it and form a reasonable judgment as to its consequences on his interests. Otherwise, as is the case here, it is not in a position to contract lawfully.
Therefore, the Commissioner finds, the action of the API in granting the loans at issue and its attitude, for nearly a decade, of taking no action to address the serial delinquencies in repayment of the loans, undeniably raises many questions. A simple examination of the account statements of the disputed loans reveals that no instalment was ever paid by the Complainant on either of the two loans.
Therefore, the API's responsibilities, moral, civil and otherwise, are immense, he concludes. These are responsibilities, both to the complainant and to the Co-operative, and by extension to the State, because of the consequential damages caused by the loan in question and will be caused by the inevitable write-off of the disputed loans, he noted. Ioannou, adding that the variously damaging and illegal behaviours of Strovolos SE have been adequately reported in the Report of the Investigation Committee on the Collapse of the Cyprus Cooperative Credit System, chaired by Mr. In addition, on the part of Strovolos CCI, they do not appear to have carried out the necessary checks and/or acted with due diligence during the examination of the application for the granting of both loans and/or after their granting, the Commissioner concludes. Nor did they take the necessary steps, as they should, to protect the complainant as a person with an intellectual disability. Consequently, they violated both the provisions of Art. 149, as well as the relevant provisions of the Persons with Intellectual Disabilities Act, 1989.
However, any claim on the part of the CEDIPES, namely, that it was unaware of the complainant's condition, does not appear to affect the outcome of the final decision, since the complainant was and is severely mentally impaired, according to the compelling evidence and testimony before the Commissioner.
With regard to the allegation that the complainant never reaped the amounts disbursed because of his condition, the Commissioner states that the complainant appears to have been exploited by third persons, by whom he was not only induced to contract with the API, but it appears, always in accordance with the relevant allegation, that those persons reaped the amounts in question. Accordingly, both the granting of the loans at issue and the subsequent handling of them are in conflict with all banking logic and practice and are in complete contradiction with any rational concept of a legally granted loan, he concludes.
Mr. Ioannou says that he referred the case to the Attorney General, on the basis of Article 27(1) of the Law, which provides that the Financial Commissioner "shall send the cases for which a criminal offence may have been committed and the cases that may concern the public interest to the Attorney General of the Republic". In addition, he also informed the Minister of Finance of any action he might take, because the CEDIPES, against which the complaint is directed, is an entity controlled, in substance, by the State, as the complainant is a person with an intellectual disability, and therefore his rights are protected and regulated by the Law on Persons with Intellectual Disabilities of 1989, which also establishes the State's responsibilities towards him.
Finally, the Commissioner stresses that it is imperative, in order to restore legality and effectively implement the 1989 Law on Persons with Intellectual Disabilities, that the CEDIPES proceed immediately to release the Complainant from any claim in relation to the disputed loans, discharging, in full and in full, any liability that may arise thereunder, including cancellation of all relevant mortgage collateral for the loans in question. It is necessary for the State to take steps to this end.
In the meantime, it notes that the final decision in the case was based solely on the evidence before it, since, despite its constant requests to CEDIPES for further clarification, the entity in question did not respond as it should have done. This omission constitutes a punishable offence, as stipulated in Article 26 of the Law on the Establishment and Operation of the Single Body for the Extrajudicial Resolution of Financial Disputes of 2010, he notes.
Source: KYPE
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