By Stelios Orphanides
A Cypriot court has ruled in favour of a bondholder, who had been talked into investing his deposits in contingent convertible bonds issued by Cyprus Popular Bank, widely known as Laiki, lawyer Alecos Markides said.
Markides, who was commenting in an interview with state-radio CyBC on Friday, said his client, who had invested €1.8m in 2010 and 2011 in securities issued by the lender, which went out of business in 2013, was considered credible by the court which accepted his version of the story and rejected that of the bank.
“It was a citizen who converted his deposits into securities after being encouraged by a manager from the bank at the time,” Markides said. “In this case, we had someone who described how a certain manager of a certain branch encouraged him to convert his deposits into securities”.
“It is a first-instance ruling and we don’t know if it will become final as it depends on the administrator of Laiki whether he will appeal,” said Markides who served as attorney-general until 2003.
In the event the ruling becomes final, who would ultimately have to compensate his client is not clear.
“It is early to say,” he said in response to a related question. “I am meeting my client today and we will discuss further steps”.
Markides added the fact that his client resorted to the court after the bonds were converted into equity in 2012 when the bank was nationalised and ahead of the culmination of the banking crisis in 2013, did not make the case different from other similar lawsuits filed after the crisis.
According to the lawyer, while there may be similar accounts by other investors about other managers of other branches of the same bank it is unknown whether another court would accept those plaintiffs’ version or that of the bank. Therefore, the application of the decision of the court in the case is not general.
He added that efforts to have similar cases trialled in a pilot lawsuit have so far yielded no results as the objections raised by the lawyers of the defendants did not allow the courts to set a date for a hearing.
Investors who invested in bonds issued by Bank of Cyprus and Laiki claim to have been defrauded of €1.5bn.