HUNDREDS of investors entitled to have their money returned from companies awaiting listing on the Cyprus Stock Exchange (CSE) may have to resort to lengthy legal battles to recover their funds, the Securities and Exchange Commission (SEC) said yesterday.
Tomorrow is the deadline for the return of investors’ cash from the 150 companies awaiting a CSE listing under a law passed last month, but many companies are either stalling or refusing outright to give back the money.
Others have tried to get out of returning the money by issuing title deeds for shares since the law was passed, but this will not absolve them, said Investors’ Association president Alkis Argyrides.
Argyrides told the Cyprus Mail yesterday that the new law was not clear on what would happen when tomorrow’s deadline passed or what investors who were still waiting would have to do.
The law passed by the House late last month said anyone who had invested money in companies via irrevocable applications had until November 30 to claim their money back, plus six per cent interest calculated from the day of collection, if their shares had not been issued before October 18.
Companies who have not yet listed but did issue titles before this date are exempted.
The SEC has already called on the companies affected to comply with the new law, but can do little if they do not, said chairman Andreas Charalambous.
“We are trying to pressure the companies to act according to the spirit of the law,” Charalambous told the Cyprus Mail. But he said that if the companies did not, individual investors would be obliged to pursue their cases through the courts.
He said the SEC’s job was only to secure a means by which investors could get their money back.
“It is an issue between the investors and the companies,” he said.
Charalambous said it would be impossible to gain a clear picture of the current situation, but he could confirm that a lot of companies were reluctant to give the money back. “I know a lot of cases of this, or of cases where companies have now issued the shares,” he said. Charalambous said there had been considerable interest among investors in getting their money back, but he could not put a figure on it.
Agryrides said the number ran into the hundreds. “But the law is not crystal clear and there are some gaps which the investment companies are using to get out of it,” he said. “But I must say that in many cases the companies are paying.”
Argyrides said some companies were interpreting the October 18 deadline as meaning they should either register shareholders at the Companies Registration Office or issue the titles. “The point is how the law is being interpreted,” he said.
“It’s true the law has opened the door for people to get their money, but it means a court case.”
He said the police should intervene if the deadline was not met and that the offending companies should not be allowed to enter the CSE when their listing date finally came up. “But I’m afraid they don’t always intervene when they should,” he said. “Nothing is clear right now so we will have to wait a few days to see, or until a few cases are tested.”
Under the new law, companies who refuse to return investors’ cash plus interest will be subject to up two years’ imprisonment or a cash fine of up to £50,000 or both.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
