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Incensed pre-bail-in BoC shareholders file law suit

Archbishop Chrysostomos

By Angelos Anastasiou

THE BANK of Cyprus’ (BoC) old shareholders association will oppose the lender’s upcoming €1 billion capital issue and file a class-action law suit against the bank and other authorities, it announced on Monday.

Speaking after an extraordinary board session of the association’s board, chairman Archbishop Chrysostomos said that a resolution was agreed on, which will be handed to President Nicos Anastasiades.

“The extraordinary session expresses its full confidence in the association’s board, and authorises it to continue its efforts to restore the rights of the Bank of Cyprus’ old shareholders,” Chrysostmos quoted from the resolution.

“The resolution calls on all association members, as well as all Bank of Cyprus shareholders (old and new) to attend the forthcoming general meeting and vote against the planned capital issue, unless the bank opts to restore the old shareholders on the basis of our proposals.”

“It further calls on all association members, as well as all old shareholders of the Bank of Cyprus, to file class-action suits against the Bank of Cyprus and others, aiming at restoring their rights, or, alternatively, the reimbursement of their losses.”

Last week, the association’s board had held a news conference to announce that it demanded either the restoration of the value of old shareholders’ equity stakes in the bank by recognising a €1.9 billion profit arising from the BoC’s takeover of some of ex-Laiki bank’s operations, or the granting of property owned by the BoC in the occupied areas, held in the lenders books at zero value. If neither demand was granted, the association had warned, extreme measures would be taken, including law suits for unfair treatment.

Monday’s extraordinary session authorised the association’s board to deliver the resolution to Anastasiades and ask that all necessary decisions to vindicate old shareholders are taken.

“It also authorises the board to take any and all other legal measures at its disposal,” the resolution read.

Chrysostomos said he would seek an audience with President Anastasiades for this issue, adding that the “injustice and the illegalities that were conducted must be reversed and stopped, because we will not avail ourselves of the Cyprus justice system only – in the end, we will also engage the European one.”

He also said that the more people decide to join the legal battle, the better, because “when there are many of us, the government will be forced to consider us.”

Board member and legal consultant to the association Kypros Chrysostomides said that “it is more than obvious that the treatment the Bank of Cyprus’ old shareholders were subjected to is clearly illegal, based on both the Cypriot constitution and European law, and now based on company law because the Bank of Cyprus is arbitrarily going ahead with a capital increase at the expense of every shareholder, old and new alike.”

“In order for a law suit to be successful and for the Bank of Cyprus, and the state, to feel pressure, there must be a large number of plaintiffs against the Bank of Cyprus, Laiki’s administrator, the Central Bank and the finance minister,” Chrysostomides said.

“If 500 to 1,000 shareholders join this class-action suit, its cost will be very low and its impact will be immense.”

Speaking on state TV on Monday night, board member Stelios Nicholson said the old shareholders whose holdings were destroyed as part of the 2013 bail-in on deposits had been left with no choice.

“Since last week, we have tried to see whether there was any intention to restore old shareholders without resorting to the courts,” he said. “Unfortunately, both the Bank of Cyprus and other bodies are still mulling over our issues while events are unfolding, so they have left us with no other choice than to go the legal route.”

Asked whether the risk of destabilising the BoC further was factored into their decision making, Nicholson was defiant.

“Given that ‘Kinon Kiprion’ [BoC slogan implying national solidarity, roughly translated as ‘Common among Cypriots’] used to be embodied in the Bank of Cyprus’ 88,000 old shareholders, who were stripped of their value once with the bail-in of deposits, and are now being stripped of their property a second time with the new interested investment funds, one can understand that this bank is foreign to us.”

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