THE BANK of Cyprus finally has a board representing it new shareholders, but looking at its composition it would be no exaggeration to say that our only hope are the Russian directors. They are the only ones likely to provide the kick-ass leadership that has been so desperately lacking at the sinking bank the last six months.
They have a strong incentive, recovering some of their lost millions, will have no links – and therefore no obligation to help – to big, local businesses that cannot service their loans and will abhor seeking consensus with the union on staff issues. The bank would benefit from the more ruthless management style used at businesses in Russia.
There are six Russians on the 16-member board, all with significant business experience, but all press attention has been focused on the man with the unpronounceable surname – Vladimir Strzhalkovskiy – who was reportedly a former KGB colleague of President Putin.
Strzhalkovskiy, who was also formerly CEO of the giant mining company Norlisk Nickel – the biggest nickel producer in the world with an annual turnover in excess of $10 billion – was elected vice-chairman and is more than likely to rustle a few feathers.
On Wednesday morning, the day after their election, several of the Russian directors arrived at the bank accompanied by their hired muscle and the first thing they asked to see, according to our mole, was a list of the bank’s biggest non-performing loans, news that may have caused a little stress and anxiety among our big developers.
There were also reports that the temporary CEO Christos Sorotos had been shown the door by the Russians but there has been no confirmation from the bank.
MEANWHILE the BoC is currently looking for Russian speakers to hire as translators for their new directors who are, understandably, unwilling to speak in English at board or committee meetings. It might not be long before senior managers at the bank would start taking Russian lessons as knowledge of the language could be considered a brown-nosing advantage.
Most senior managers of the BoC had decided to attend last night’s annual Cyprus-Russian Gala at the presidential palace in the hope their unwavering commitment to strong ties between the two countries would be seen and appreciated by their new Russian masters that might also be there.
At least they did not have to pay for the €90 a head tickets. The gala is in aid of the Radiomarathon Foundation, which the BoC inherited together with the €9.5 billion ELA from Laiki, and several dozens of tickets were purchased by the bank in order to help the charity. After the election of the new board, there was big demand for these tickets from the senior managers, who felt their presence at the gala was a professional duty.
AFTER the election of the new board, rumours were circulating that the Governor of the Central Bank Professor Panicos, whose approval of the new directors was necessary, had decided to make two of them stand down because he had deemed them unfit to be directors; one was supposedly the vice-president, but does Panicos possess the cojones to stand up to a former Putin colleague?
This joke about the approval of directors by the Governor, which the Central Bank press office has been making a big issue out of, has a lot to do with the insecure professor’s wounded ego, which was dealt a bitter blow by the crafty DISY chief Averof.
Power-mad Panicos had insisted he would personally use the 18 per cent shareholding of the resolution authority in the BoC in the board elections. But Averof changed the law 10 days ago, making the resolution authority share its powers with the ministry of finance and the Securities Commission.
These two then decided by majority to give the power to vote in the BoC elections to the perm sec of the finance ministry, thus excluding Panicos who has been sulking like a kid deprived of his Playstation ever since.
THE SULKING Governor has been trying to get his own back on the government. Last weekend he leaked, via a third party, an e-mail from the troika warning the government against political interference in the election of the BoC board to Politis which made a front page story out of it. No prizes for guessing who tipped the troika off.
In another attempt to show us he remained super-powerful, the complex-ridden professor had his press office issue statements informing us that the Governor had the authority to cancel the election of any new BoC director he personally considered unfit to sit on the board. He had not vetted the candidate before the AGM and board elections and would do so subsequently, a Central Bank announcement said.
Then there was the obligatory leak about the troika’s alleged dissatisfaction with the new board of directors. The report was carried on Thursday by the professor’s favourite medium for leaks Stockwatch website, which has become the semi-official mouthpiece of the Central Bank.
Stockwatch said the troika was ‘concerned’ about the composition of the board and had asked to see the Central Bank’s evaluations of those elected as directors.
As if the troika gives a toss about who is on the bank’s board. But the pitiful Panicos has made out that the lenders are concerned so if he decided to flex his weakened muscles by making a couple of directors stand down he could courageously blame his decision on the troika.
CALL ME ultra-conservative or reactionaty but when I saw the photograph of the new chairman of the B of C, Kristis Hassapis, I was shocked by his looks. Hassapis, an economics professor at the University of Cyprus, looks a more like a vain, over-aged rock star striving to maintain his long-lost youth with his long wavy hair and designer stubble than a banker.
Perhaps I am being a boring old fart but I would have much greater confidence in a bank chairman who pays regular visits to the barber, shaves every day and wears a suit, shirt and tie. Is an unshaven, long-haired, middle-aged academic going to restore much-needed public confidence and trust in the struggling BoC? And public confidence could be completely shattered if, as a compromise, he decided to wear his hair in a pony-tail.
Hassapis may be an excellent economics professor but academic qualifications mean nothing as we have seen. Does anyone need reminding of the damage done to the banking sector by an economics professor whose name begins with ‘P’?
THE QUESTION everyone is asking is how Professor Hassapis became chairman of the BoC? It was reported that he represented the ‘provident funds’ but we were never told which funds. The ‘provident funds’ he represented were those of the members of the bank employees’ union ETYK.
ETYK became the second biggest shareholder in the BoC after the bail-in of its provident fund deposits so it had the votes to elect its people to the board. To show his support of Hassapis, union boss Loizos Hadjicostis arrived at the AGM with Mrs Hassapis, who is a senior official at the labour ministry.
Having a Hadjicostis protégé as chairman of the bank is not just frightening it is alarming, which is why I will repeat that the BoC’s only hope are the Russians.
THERE was one novelty at the BoC AGM that we would do well to introduce to our political elections. Shareholders were allowed to cast negative votes against candidates they did not approve of. It would be great if we could the same next time there were parliamentary elections. Those with the fewest negative votes would be elected, which would mean the candidates that voters believed would do the least harm to the country would enter parliament. As experience has shown, giving power to the most popular candidates is a big mistake.
OUR GOOD friend and Alithia columnist Alecos Constantinides took exception with our establishment’s remark last week about the “AKEL sheep that were brought to the House of Representatives to bleat against the co-op bills.”
In his Wednesday column he pointed out that the “sheep stayed home”. Those “100 to 200 people that were outside the House, during the debate of the bills, were not sheep, they were paid employees of the central committee, paid employees of the party, the nomenclature of the party.”
It was a fair point and the same phenomenon was evident on Monday when the commies organised a march to the US embassy to express their opposition to an air-strike on Syria. Again the sheep stayed home and the protesting was done by the paid employees of the party, who must have seized the opportunity to earn some overtime pay as the march took place after office hours.
SPEAKING of Syria, it was wonderful to hear that Marios Garoyian’s proposal for preventing an air strike by the US was adopted by Moscow and accepted by the Yanks. DIKO welcomed Moscow’s proposal for the destruction of Syria’s chemical weapons and said on Tuesday “this was exactly the idea that had been publicly presented the previous week by DIKO leader Marios Garoyian.”
It was disappointing the Russian government did not give any credit to Marios. Meanwhile, the Greens also claimed ownership of the Russian idea, as the Perdikis party had submitted this proposal to the House of Representatives and the European Parliament.
BACK IN the late seventies a Nicosia businessman bought a plot of land just outside Prodromos village in the Troodos mountains and built a country house. However, because of its location the house did not have running water.
The plot on which it was built was at an altitude higher than Prodromos so his house could not be given water from the reservoir that supplied the village. To this day, the owner had to pay a water truck to fill the house’s water tanks.
But in the last week the house-owners were given some good news – Prodromos village would soon be supplying the house with running water because it would build a new reservoir. There are another two houses, one very recently completed, in the same area above the village that would no longer need the water truck.
The Prodromos mukhtar – or community leader, as they say in polite society – is not too thrilled about having to build a reservoir his community does not need at a cost to the village council of some 50 grand.
Building a reservoir, at a cost of 50 grand, to serve three houses used as holiday retreats for a few weekends and the odd week every year is a resoundingly stupid idea. It makes you wonder who took this lunatic decision at a time when local authorities are being starved of cash by the government because the state is broke.
Surely the poor Prodromos council could have wasted this money on a slightly less meaningless investment that may have been of some benefit to locals.
WHO TOOK this insane decision? From what we hear, the recently completed house belongs to a very influential personality, who pulled a few strings at the interior ministry and was thus spared the inconvenience and expense – a couple of hundred euro a year at most – of having to rely on a the water truck supplying the house with water.
The owner of the new house, we are reliably informed, was a close relative of the late Archbishop Makarios, the members of whose extended family still seem to have a hell of a lot of clout in state circles. The Makarios clan is treated as our royal family.
Our establishment will never again mock those who still used the slogan ‘Makarios lives’, because they have a point. Not only ‘Makarios lives’ he also decides local government policy.