THE NEPOTISM, cartels, bureaucracy and “selective supervision” that operate in Cyprus, were blasted by Marfin Investment Group (MIG) Executive Vice-Chairman Andreas Vgenopoulos yesterday in a broadside against everyone he felt had obstructed his business plans.
Vgenopoulos was speaking at the bank’s AGM where he was attempting to justify the transfer of Marfin Popular Bank’s (MPB) headquarters to Greece.
Emotion won over business arguments as Vgenopoulos slammed the “cartels and cosy arrangements that existed in Cyprus before we arrived”, including at the board level of the two biggest banks, and “an institutional framework that penalises you for taking a risk abroad”.
He said that there was an “economic status quo” that “operated as a state within the state”, that the Securities and Exchange Commission had been selective in “hunting us pitilessly since we set foot in Cyprus.
He also condemned “the gerontocracy which continues to survive in Cyprus”, saying that “whenever a senior position comes available, a discussion is held to find the right candidate, as long as that person is over 75 years old.” Vgenopoulos said he was no longer surprised when a simple application by his own bank could take nine months, while a more complicated application by a competitor would take just two. “If I put down €4 billion tomorrow to fund a bank takeover, who would approve it? When?”
For such a senior businessman, he seemed to be taking things remarkably personally. His temper flared as he said: “I didn’t start this banking group to make into a mediocrity”, and ended by saying he had “spilt blood for this country”, and that “if a Cypriot is someone who is inspired by the principles of Hellenism, someone who wants equal and fair treatment without dirty tricks, without putting personal interests first, then I am more of a Cypriot than the lot of them.”
Vgenopoulos started his speech calmly enough, explaining in detail the three main reasons for the proposed merger of MPB into wholly-owned subsidiary Marfin Egnatia Bank (MEB) and the transfer of the banking group’s headquarters to Athens. These were to “improve the Group’s strategic flexibility in terms of potential expansion in the Greek market and south-east Europe, strengthen the Group’s capital base by 10 per cent, and benefit from the provision of Greek law to execute share buyback programmes with a view to facilitate the Group’s strategic expansion”.
Vgenopoulos said that despite its obvious negative impact, the “crisis also offers opportunities”. He said that the banking group needed to be able to move fast in order to take advantage of those opportunities, and moving the headquarters to Greece would offer a “framework that would want us to succeed in that direction”. This first veiled reference to what earlier in the day he had called the “conservatism” of the Cyprus banking supervisory authorities led to more sarcastic comments, and finally full-frontal attacks.
The senior banker then took time to dismiss suggestions that the proposed changes would mean the end of MPB in Cyprus. “Nothing could be further from the truth. We will never leave Cyprus. I think that whoever rushed to celebrate getting rid of us will regret it.” He also confirmed that the bank’s continuing presence in Cyprus would retain the name of MPB, with himself as Chief Executive”.
Around 67 per cent of MPB shares are held by thousands of private individuals, who will need to be convinced that the proposed transfer of the banking group’s headquarters to Athens is in their best interest. Once the balance-sheets of MPB and MEB are restructured on 30 June, that approval will be sought at an Extraordinary General Meeting to be held in four or five months’ time from now.
One potential sticking-point is that the approval of the respective supervisory authorities are also required before the transfer can go ahead. Although the Cyprus Central Bank has not made any public comment since the proposed transfer was announced last Friday, there are indications that obtaining its approval will be no easy matter.
Shares in MPB continued to rise yesterday, closing at 5.33 per cent up, having reached 7.23 per cent earlier in the day.
