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BoC board told to quit, green light for Ross

Chrystalla Georghadji allegedly took part in Resolution meetings on Laiki, deemed as conflict of interest

By Constantinos Psillides

CENTRAL Bank of Cyprus (CBC) Governor Chrystalla  Georghadji sent a letter to the board of Bank of Cyprus (BoC) on Monday, asking all of them to step down and call for a general assembly as soon as possible, following the recent change in the bank’s shareholding.

A BoC source confirmed that the board has indeed received the letter and that a board meeting is scheduled to take place on Tuesday to discuss its contents.

Georghadji’s  letter was in response to an application filed by the BoC, asking that US billionaire Wilbur Ross – who is investing over €400m in BoC and controls 19 per cent of the banks’ shares – be allowed a seat at the board.

Georghadji rejected the application, explaining that the board cannot number more than 13 people, with Ross being the 14th.

Instead, the Central Bank Governor asked the board members to step down and call for a general assembly so the new board can be chosen by the new shareholders following last month’s approval for a €1bn capital increase.

In a clear message of distrust, Georghadji also told the current board to refrain from taking any “strategic decisions” in the meantime, “so as the new board isn’t faced with any fait accompli.”

The CBC governor’s letter paves the road for Ross’ investment to materialise, together with the €120m from the European Bank for reconstruction and Development (EBRD).

This is not the first time Georghadji has asked for the board of BoC to resign. In June, she gave the board an ultimatum to proceed with the much-needed capital increase, threatening them that she would publicly ask for their resignations if they didn’t comply.

Both current board members and Ross will have a chance for election to the bank’s board at the shareholders general assembly, Georghadji’s letter said.

 

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