Cyprus Mail
Cyprus

BoC shareholders elect new board

By George Psyllides

BANK OF Cyprus (BoC) shareholders on Tuesday elected a new board — which includes six foreign nationals, one reportedly a former KGB official — during a tension-filled AGM that it is hoped would ultimately mark a new beginning for the stricken lender.

The new board is made up of Xanthos Vrahas, Marinos Yialelis, Marios Yiannas, Andreas Yiasemides, Ioannis Zografakis, Marios Kalohoritis, Constantinos Katsaros, Adonis Papaconstantinou, Christis Hassapis, Costas Hadjipapas, Anjelica Anshakova, Dmitry Chichikasvili, Erishkan Kurazov, Igor Lojevsky, Anton Smetanin and Vladimir Strzhalkovskiy.

Hassapis was later elected chairman and Strzhalkovskiy vice-chairman of the board.

The 16 members were chosen out of 46 candidates.

According to The Moscow Times, Strzhalkovskiy was “the most familiar name among Russian nominees.”

A former Norilsk Nickel CEO and former KGB colleague of Russian President Vladimir Putin, Strzhalkovskiy “may still have about $10 million (about €7.6 million) in the bank,” the Moscow Times said.

Strzhalkovsky received a $100 million payoff package when he stepped down from Norilsk Nickel in late 2012.

His CV was not included in the list of 46 candidates nominated for board positions.

The six foreign nationals represent individuals who lost considerable amounts of money in the forced conversion of 47.5 per cent of deposits exceeding €100,000 in order to recapitalise BoC.

They received equity in return.

One of the main criticisms from European paymaster Germany at the time was that the island could be a conduit for money laundering from Russia because of close business ties.

BoC was the biggest of the two Cypriot banks deeply affected by a €10 billion bailout from international lenders.

The second, Laiki, was wound down. Large depositors in that bank saw amounts exceeding €100,000 seized and what remained was merged with BoC.

The cash-grab was unprecedented in the history of the eurozone debt crisis.

Anger from shareholders was evident, though mostly from so-called ‘old shareholders’ who saw their equity holdings diluted to effectively zero, rather than individuals whose cash was converted to fresh equity.

“The Greeks, the Irish, the Spanish and the Portuguese got cash for their banks. When our turn came they told us to slit our necks,” said Stelios Bekris, a shareholder.

They wanted the AGM postponed because the bank had not yet published its audited financial results.

“It is unprecedented for our country to call an AGM without the audited accounts,” Takis Xenopoulos said. “We have nothing in front of us and you are asking us to vote for a board?”

Shareholders were told that the results will be discussed during a general meeting probably next month.

Under the bailing-in of Bank of Cyprus Public Company Limited Decree of 2013 the nominal value of all ordinary shares was reduced from €1.00 each to ordinary shares of nominal value of €0.01 each.

The value of the old shares is the subject of separate applications already filed with the Supreme Court.

Old ordinary shareholders and their lawyers are contesting this value.

When BoC interim chairman tried to explain the background to the lender’s predicament, shareholders shouted their disapproval.

All they wanted to know was how and why their shares were now worth nothing.

The meeting turned into a shouting match numerous times as they vented their anger at the interim board.

“I lost everything. They took my property,” Bekris said.

Voting went ahead nevertheless, despite suggestions that the AGM could be illegal.

“If a court nullifies the AGM at a later stage it is a different issue,” BoC legal adviser Polys Polyviou said.

Bekris and others called on the old shareholders to leave the AGM without voting, though their departure was not expected to affect the outcome as, together, they now held around 0.5 per cent of the shares.

One woman suggested the whole affair was a conspiracy whose ultimate goal was to dissolve the Republic.

“There should be an uprising. You are all asleep,” she said, as she joined others leaving the hall.

Present at the AGM were 3,549 shareholders, either in person or through proxy, representing 53.6 per cent of the bank’s capital.

Earlier, interim CEO Christos Sorotos stressed that BoC was now a new bank that had nothing to do with the past.

Summing up his 100 days as CEO, Sorotos said the interim leadership managed to stabilise the bank and deliver it to its shareholders in spite of those who believed it would not make it past August.

He was angered, he said, when he heard people in key state positions doubting the survival of the island’s biggest financial institution.
“We tried to achieve the bank’s reconstruction without deconstruction,” he said.

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