Cyprus Mail
Cyprus

Bondholders gather support for compensation scheme ahead of elections

A group representing investors who lost money in Cyprus’s banking crisis when the value of their bank bonds was wiped out, asked its members to vote on Sunday’s elections according to what their conscious dictates after gathering support from political parties for a compensation scheme, the Cyprus News Agency reported on Monday citing the group’s chairman.

The scheme provides for the compensation of each bondholder with up to €100,000 from the Central Bank of Cyprus’s reserves and the gradual compensation for the rest of the investment lost down the road, depending on the performance of the Cypriot economy, the Cyprus News Agency reported citing the association’s chairman Phivos Mavrovouniotis.

At a general meeting held by the group on April 24, in Limassol, DIKO pledged to compensate over the next 20 years, bondholders and depositors who lost money in Cyprus’s banking crisis with 10 per cent of the primary fiscal balance, while the Greens demanded that President Nicos Anastasiades sticks to an older compensation scheme which involved the participation of Bank of Cyprus, which declines to do so, Mavrovouniotis said according to the Cyprus News Agency. Solidarity, a group led Eleni Theocharous, a member the European Parliament who defected from DISY, proposed the compensation of bondholders with Bank of Cyprus immovable property in the Turkish held areas of Cyprus.

The group held its meeting ten days after the parliament passed a controversial law offsetting loans with bonds which served as collateral extended by Bank of Cyprus and Cyprus Popular Bank. Anastasiades referred the law to the Supreme Court citing provisions that conflicted with the constitution, a step that Mavrovouniotis criticised.

The chairman of the bondholders’ association said that some unspecified members of the group are running for the May 22 parliamentary elections, according to the Cyprus News Agency.

Mavrovouniotis said that the group is in favour of filing class actions to resolve the dispute at the courts adding that they plan to file a lawsuit, according to the Cyprus News Agency.

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