The board of the Bank of Cyprus announced on Tuesday that the Annual General Meeting (AGM) of its shareholders will take place on November 20.
The board had convened to discuss developments following a letter sent by the Governor of the Central Bank of Cyprus (CBC), Chrystalla Georghadji instructing the entire board to resign in light of the recent capital increase of €1 billion that saw new shareholders control some 47 per cent of its stock.
One of the major players in the increase, American investor Wilbur Ross, is currently in Cyprus and has asked for a seat on the lender’s board – a request Georghadji was forced to deny as no seats on the 14-man board were available and CBC directives do not allow for additional ones to be created.
Instead, Georghadji sent a letter to the current board – which was installed by, and represents, the shareholders that emerged from the March 2013 conversion of 47.5 per cent of uninsured deposits – requesting that they resign ahead of the upcoming shareholders’ AGM, which will inaugurate the new shareholders’ participation.
As well, Georghadji asked that the current board refrain from making any “strategic decisions,” reserving them for the new team of directors.
Though current board members are eligible for re-election at the AGM, Georghadji’s intervention sent new shockwaves to a still vulnerable organisation and did not bode well with everyone.
Sources cited by Stockwatch business website claim that DISY leader Averof Neophytou has been growing increasingly impatient with Georghadji’s most recent calls.
“At a time when Parliament – with all its weaknesses and mistakes, but sensing national responsibility – is seriously considering ways to break the difficult impasses, some independent institutions defy the significance of the period and provocatively seek to detonate all efforts to achieve mutual understanding,” a visibly frustrated Neophytou told the House plenum on Tuesday.
His remarks were said to relate to Georghadji’s intervention on Monday, as well as a recent CBC directive to commercial banks and co-operatives with guidelines on stern wording to be used in letters warning non-paying borrowers of the consequences of non-payment.
Meanwhile, a rumour that new BoC strongman Ross had requested and scheduled a meeting with Archbishop Chrysostomos, remained unverified Tuesday.
Though the unlikely duo’s planned meeting was tacitly confirmed by sources inside the lender, Archbishop Chrysostomos’ office pled ignorance on whether such a meeting had been scheduled.
“The Archbishop is currently in Paphos, where he will remain at least until Wednesday, and likely longer,” his secretary told the Cyprus Mail.
Chrysostomos had been the most vocal critic of the capital increase that allowed Ross entry to the bank’s shareholding, and is the chairman of the association of the bank’s old shareholders who seek to be compensated for being wiped out during the bank’s recapitalisation last year, by being offered access to BoC assets.
Additionally, he has long warned of the dangers of allowing the BoC to fall into the “hands of foreigners,” who would only be interested in making a quick buck and not necessarily in the wellbeing of the Cypriot people.
It is likely that Ross wants to meet with Chrysostomos in order to help defuse the tension the religious leader’s opposition to recent strategic decisions has created.
