Cyprus Mail

Renewed violence in bond holder protest

Protesters scuffling with police outside the Bank of Cyprus headquarters in Nicosia on Monday

By Constantinos Psillides

A PROTEST by outraged bond holders outside the Bank of Cyprus’ (BoC) main offices in Nicosia once again turned violent on Monday after windows were smashed and employees threatened.

The bond holders broke through the police line that was guarding the area and threw oranges and eggs at the building, while others hurled rocks and bricks from the surrounding area. The protesters smashed office windows with bricks and shouted at employees.

During the scuffles with police a woman fainted and was rushed to the Nicosia General Hospital.

Representatives of the bond holders were denied access in the building, where they were supposed to meet with bank officials.

This is not the first time a bond holders’ protest turned violent. On November 20, 2014 during the BoC annual general meeting the bond holders again hurled stones and bricks at the building, breaking glasses and threatening bank and government officials.

Earlier this month the bond holders once again clashed with the police when they tried to enter the conference centre in Nicosia where European Central Bank president Mario Draghi was hosting a press conference.

The issue dates back to the late 2000s, when the Bank of Cyprus and now-defunct Laiki Bank issued the first of a series of Convertible Enhanced Capital Securities (CECS), an exotic financial product that offered high yields at high risk.

Of some €2.5 billion issued by the two lenders, most of the securities were purchased by institutional investors, but over €1 billion was sunk by private individuals. They now claim that the bonds were presented to them by their bankers as something of an equivalent to bank deposits, which they most decidedly are not – for example, the issuer (the bank) can opt to buy these bonds back, or not, meaning the investor may never see his or her funds returned.

Following the March 2013 crisis, the CECS issued by the Bank of Cyprus and Laiki were wiped out. Bank of Cyprus’ securities were technically turned into ‘Category C’ bank equity, which basically means they are so far down the line of priority they have zero chance of ever approaching their original value.

The bond holders are now demanding to be compensated, claiming that they were duped by the banks.
The state has urged bond holders to sue the banks. To that end the Cabinet approved on March 3 a proposal for free legal aid.

Related Posts

Branch and employee reduction a necessity, Hellenic Bank CEO says

Kyriacos Nicolaou

UK and Russia among Cyprus Airways winter destinations

Kyriacos Nicolaou

Cyprus Business Now

Kyriacos Nicolaou

Paphos gets into the spirit of the season

Paul Lambis

Coronavirus: Three deaths, 576 new infections announced on Wednesday (updated)

George Psyllides

Akel says it will reject government’s 2022 state budget

George Psyllides


Comments are closed.