By Angelos Anastasiou
LAIKI BANK investors, who had filed a suit with the Supreme Court against the decision to recapitalise the lender using their own means, were granted an extension until April 6 to argue their case, the Supreme Court ruled on Monday.
Some of the plaintiffs’ lawyers said that in light of the court’s ruling with regard to similar cases by Bank of Cyprus investors – they were dismissed by the Supreme Court and referred to District Courts – they required more time to consult with their clients in deciding whether to withdraw the suits.
But, they said, they remain sceptical at the prospect of withdrawing the suits, since this would likely affect their clients’ right to resort to the European Court of Human Rights (ECHR). They argued that abandoning their cases may be deemed inadmissible by the ECHR because it mandates that all national remedies must be exhausted before it can look at a case.
Meanwhile, members of the Capital Securities Holders’ Association – who claim to have been defrauded by Bank of Cyprus and now-defunct Laiki Bank and demand their money back – blocked traffic in the Nicosia-Limassol highway near Chirokitia on Sunday morning.
The police spokesman said that the impromptu protest was carried out on the sidelines of the association’s general meeting, which was scheduled for 11:00 am at a Chirokitia restaurant on Sunday.
Individual bondholders had invested in high-risk, high-yield bank capital securities issued by the two lenders in the retail market, only to see their investments all but wiped out when the two banks were restructured and recapitalised in March 2013, with Laiki being folded into BoC.
At the time, BoC securities were replaced by BoC low-priority stock, while Laiki securities were left with legacy Laiki, currently under liquidation.
But in addition to the capital invested in the securities, bondholders claim they were fooled into taking out loans using the securities as collateral, which they are now being asked to repay – despite their assets having been rendered worthless.
Association chairman Phivos Mavrovouniotis has long warned that failure to accommodate the bondholders’ demands – on the part of either the government or the Bank of Cyprus – would result in “uncontrollable reaction” by his members, suggesting he may not be able to control them.
A glimpse of such reaction was evident during the BoC’s annual general shareholders’ meeting last November, when an angry mob of bondholders violently stormed the bank’s headquarters in order to gain entry to the meeting.
The mob moved the protest outside the adjacent Central Bank of Cyprus, where they also briefly blocked traffic, inconveniencing many unsuspecting drivers.