By Angelos Anastasiou
Capital Securities Association chairman Phivos Mavrovouniotis on Tuesday urged all association members to file law suits immediately, after he was advised by President Nicos Anastasiades that an out-of-court settlement was not feasible.
Following the meeting, Mavrovouniotis said that “the President’s efforts at an out-of-court settlement present with very serious difficulties because the Bank of Cyprus has denied such a prospect, urging us to go through the courts, the decisions of which it will respect”.
Therefore, he added, the President’s proposal, which included the Bank of Cyprus’ involvement in issuing shares to bondholders and offsetting loans guaranteed by the securities against the value of holdings in securities, cannot be implemented.
“As a result, six judges have been appointed – two each in Nicosia and Limassol, and one each in Paphos and Larnaca – in order to start the procedure in court”, Mavrovouniotis said.
“We are more than confident that the cases will be won and those who bear the responsibility will compensate their victims.”
Private holders of convertible enhanced capital securities issued by the Bank of Cyprus and now-defunct Laiki Bank claim they were mis-sold the financial products, which were essentially wiped out following the March 2013 events, and demand to be compensated.
Many had also drawn loans using the securities as collateral, which they are now being asked to repay.
Mavrovouniotis said that one challenge posing the association relates to holders of ex-Laiki Bank securities, which is currently under liquidation. If a court ruling is made before liquidation, he said, Laiki’s assets can be sold to compensate bondholders.
He called on all private bondholders to file law suits immediately, and added that those who cannot afford to do so may apply for state assistance.
The association’s press spokesman Leondios Hadjivassilis said that the appointment of the six judges is to the benefit of bondholders, arguing that “the first trials will vindicate our demands”.
He added that holders of securities are different cases than depositors of the banks.
“We were defrauded, and if Laiki Bank doesn’t compensate us due to a lack of funds, we will demand to be compensated by the state”, he said.
He also called for the offsetting of bond-guaranteed loans with the bonds themselves.
“It is unheard of that we own securities, which were used as collateral for loans that were then transferred to the Bank of Cyprus and we are being asked to repay them”, he said.
“Loans should be offset against the securities – if we go to court there is no way we won’t be vindicated”.