A SUPREME Court ruling allowing investors to seek the return of money from non-listed companies through legal proceedings has paved the way for around 25,000 investors to claim over £450 million, it emerged yesterday.
On Wednesday, the Appellate Court rejected an appeal by Investylia against a district court decision ordering the company to return £12,020 to Livadhiotis Bros Investments.
Livadhiotis paid the money for Investylia stock five years ago.
The company’s application for stock market listing was subsequently rejected, leaving its investors with non-tradable shares.
Invstylia argued that the law the case had been based on was unconstitutional, but their appeal was rejected.
The decision has given the green light to investors to bring lawsuits against companies for the money they lost during the financial fiasco.
Thousands of small investors lost their life savings in bubble shares between 1999 and 2001.
According to the chairman of the investors’ association, Demetris Hadjipapas, there are over 25,000 investors claiming in excess of £450 million.
Around £200 million concerned two companies, Hadjipapas added.
Meanwhile, the House Finance Committee yesterday raised questions over the lifespan of a legal aid fund aimed at helping investors take their cases to court.
The bill providing for the creation of the fund was tabled by the government in a bid to enable investors who lost money on the stock market to claim it back through lawsuits.
The bill provides for an initial £500,000 from the state coffer, to be allocated to people whose annual income was under £18,000.
Any claims should be between £2,000 and £50,000, the bill states.
The state had wanted the legal services to take on the management of the fund, but they refused. It has now been decided to set up a three-member committee for that end.
Applications for aid should be filed within six months from the date the bill comes into force and money, upon approval, will be paid in two equal instalments.
The bill provides that the fund will be replenished by the expenses paid in successful cases.
Finance ministry representative Avgi Lapathioti told the committee that the fund would have an 18-month lifespan and any pending cases would be assumed by the state after that.
Committee members wondered if 18 months would be enough for the fund to achieve its aim.
Deputies also asked whether the state would be able to provide assistance to those claiming over £50,000 and up to £100,000 and those claiming under £2,000.
They also asked for the income threshold to be raised to £20,000.
