Cyprus Mail
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FBME administrator rules out loyalty scheme payment before court ruling

By Stelios Orphanides

The special administrator of the Cyprus branch of FBME Bank, the Tanzanian lender, which had its licence revoked by the Central Bank, said that he will ignore workers’ demands for the immediate payout of outstanding claims after already authorising the disbursement of €3.5m.

The amount paid is for notice until dismissal, remaining holiday, and thirteenth salary, benefits to workers either pregnant or on maternity leave, and three quarters of their bonus, Iacovides said in an emailed statement on Wednesday.

FBME workers, dismissed by Iacovides in March, “continue to blame the Central Bank (of Cyprus) with  audacity instead of thanking it for its decisive intervention in their favour, and continue to protest until their demands are fully met,” the bank’s administrator said.

Four weeks ago, the Central Bank triggered the depositor protection scheme to enable the payment of secured deposits to the bank’s customers, days after the U.S. Treasury’s Financial Crimes Enforcement Network reaffirmed its decision to prohibit U.S. banks opening or maintaining correspondent accounts for or with FBME which it described as of “primary money laundering concern”.

“Continuation of the protests is nothing but blackmail, given that it actively prevents the return of insured deposits after the procedure to cover up to €100,000 per depositor commenced,” he said. “Protestors are investing in this in an attempt to satisfy their legally disputable demands, not as a result of a court ruling, but by force”.

Workers and their lawyers misunderstood the constructive stance showed by the Central Bank and the administrator, Iacovides added.

The workers’ lawyers “have also misinterpreted the legal circumstances” regarding the branch, Iacovides said, adding that one of them referred to a “special resolution” and “special liquidator” while no such court order has been issued.

“The inability to understand the circumstances does not help consultation and the dispute will be resolved in court,” the administrator said.

Iacovides dismissed 136 out of the bank’s 165 workers. Remaining workers entered a strike and started to protest outside the Central Bank together with their dismissed colleagues. They insist on the immediate payment of what they describe as their dues, which also include their loyalty scheme in excess of €12m.

The strike prompted the Central Bank to encourage depositors to submit their claims at the supervisory authority. According to the fbmeltd.com website which expresses the views of the FBME shareholders, as of April 30, only 120 of the total 6,500 depositors applied to the depositor protection scheme. The bank’s deposits are estimated at around €1.4bn.

Lawyer Stephanos Skordis, who represents the majority of the bank’s dismissed and remaining workers, said on Wednesday that strikers were not planning to return to work unless they were paid their dues as provided by their loyalty scheme.

“They have paid out only what they thought they were forced to pay anyway,” Skordis said earlier on Wednesday in a telephone interview.

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