By Constantinos Psillides
YET another bondholder demonstration turned to violence on Monday, after the protesters attacked reporters, cut off the road outside the presidential palace and blocked students from leaving the English School.
The protest started from Athalassas avenue and marched to the Legal Services where they handed a resolution to Attorney General Costas Clerides. While outside the AG’s offices, the bondholders attacked reporters and camera crews by throwing water bottles at them, shoving and cursing.
According to the Cyprus News Agency, the attackers didn’t want the media to cover their protest.
The bondholders then marched to the presidential palace where they blocked the street halting oncoming traffic. Riot police tried to keep the protesters at the roundabout near the palace but failed to do so. They were forced by riot police to back down, as the area was filled with parents arriving to pick up their children from nearby schools.
Bondholders representative Fivos Mavrovouniotis later apologised to the media.
The bondholders demand that those responsible for the financial meltdown be brought to justice and they are compensated for the money lost after the island’s banking sector collapsed.
Ruling DISY leader Averof Neofytou responded to the bondholders’ outrage, saying that “this a not an easy matter and I wish it could be solved by statements.”
“The bondholders have lost everything. We respect and understand their predicament. This matter needs delicate handling and we have limited options on how to resolve it. We need to act without any fanfare. These people shouldn’t be used by me or any other for political gain,” said Averof.
This is not the first time a bondholders’ protest has gotten out of hand. They have repeatedly clashed with riot police during their demonstrations, while also throwing bricks and smashing office windows at the Bank of Cyprus headquarters.
The issue dates back to about 2008s, when the Bank of Cyprus and now-defunct Laiki issued the first of a series of CECS, an exotic financial product that offered high yields at high risk.
Of some €2.5bn issued by the two lenders, most of the securities were purchased by institutional investors, but over €1bn was sunk by private individuals now claiming that the bonds were presented to them by their bankers as something of an equivalent to bank deposits, which they most decidedly are not. For example, the issuer (the bank) can opt to buy these bonds back, or not, meaning the investor may never see his or her funds returned.
Following the March 2013 events, which left Cyprus with a banking system all but nuked, the CECS issued by the Bank of Cyprus and Laiki were wiped out. Bank of Cyprus’ securities were technically turned into ‘Category C’ bank equity, which basically means they are so far down the line of priority and have a zero chance of ever approaching their original value.
