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Church withdraws application for BoC vote injunction

Traditional values Archbishop Chrysostomos

The Church of Cyprus has withdrawn an application for a court order banning the administrator of the now defunct Laiki Bank from voting at a Bank of Cyprus (BoC) AGM, the Cyprus News Agency (CNA) reported on Monday.

The request was withdrawn because of the recent change in the composition of the resolution authority, CNA said, quoting unnamed legal sources.

Lawyers acting on behalf of the Archbishopric and five other individuals and companies, had asked the court on Friday to issue an injunction excluding the 18 per cent from the vote.

The plaintiffs suggested the 18 per cent share was illegal, arguing that any decisions taken with their participation would also be illegal.

They claimed that the participation of Laiki’s administrator would cause irreparable damage to the BoC if the board was elected illegally, at the September 10 AGM.

The administrator – appointed by the Central Bank, which was also the resolution authority — controls 18 per cent of BoC’s shares, which essentially belong to so-called legacy creditors.

Last week, parliament passed a new law providing for the resolution authority on banks to comprise a trio — the finance ministry, the Central Bank and the Securities and Exchange Commission.

Previously, the Central Bank had been the sole resolution authority.

Under the new power-sharing regime, decisions on banks undergoing resolution will be taken by a simple majority.

Lawyers said they were now looking into the matter and waiting to see what the reaction of the new resolution authority would be, CNA said.

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