Cyprus Mail
Business Cyprus Greece

Greek courts force BoC to pay €3.8m in compensation

THE Bank of Cyprus (BoC) has been ordered by Greek courts to pay more than €3.8m in compensation to 44 investors in securities issued by the lender who lost money in the 2013 banking crisis, it was announced on Friday.

According to an announcement issued by the bondholders’ association, the Greek courts recently issued three new convictions against the bank which is now required to pay €3.85 to 44 holders of securities and bonds as compensation for the damage and non-pecuniary damage they have suffered, plus interest from the date of filing the claim until full payment.

“These three civil actions were registered in May 2015, and in record time they were judged and rulings were handed down, while civil actions filed in Cypriot courts in 2012 are still pending,” the group said.

The Bank of Cyprus is a going concern, they said, and if Cypriot courts follow the rationale of the courts in Greece, it will be called to pay millions in damages.

As far as Laiki Bank is concerned, the compensation under the memorandum that resulted in its forced closure is payable by the state, the group said.

“Realising the chaos that may be caused if the Cypriot courts ‘copy’ the Greek ones, the bondholders’ association is making a final appeal to the state and the Bank of Cyprus to address this issue in an effort to find an out-of-court/consensual solution, so as to alleviate the impact on the economy,” the group said.

In April, the bank was ordered by another Greek court to award €460,000 in compensation to 24 bondholders who too had lost money during the banking crisis. The court had said that the lender failed to inform investors about the risks of the convertible enhanced capital securities, when it issued them and offered them to the public in 2011.

The bank had said that it would challenge that ruling.

Thousands of investors in Cyprus lost around €700m when bonds in the Bank of Cyprus and Cyprus Popular Bank, or Laiki, were wiped out in March 2013.

BoC, which absorbed Laiki’s operations in March 2013, has repeatedly rejected compensating bondholders without, however, ruling out exceptions related to “humanitarian cases”. The bank advised bondholders to pursue legal recourse.

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