Government to earmark £500,000 for investor suits

AROUND £500,000 will initially be allocated for the creation of a legal aid fund for investors, the House Finance Committee heard yesterday.

Finance Minister Makis Keravnos presented the bill before the committee and urged its members to back it.

The bill aims to set up a fund that would provide cash for legal aid to people who invested in the stock market (CSE) between 1999 and 2000 and lost their money to bubble shares in the ensuing fiasco.

Around £500,000 would initially be contributed by the state, the minister said.

The funds would be managed by a committee including representatives of the bar and the accounting profession, as well as the finance ministry.

It would give investors the chance, under certain circumstances, to seek compensation through civil suits.

The bill provides for legal aid to people whose financial circumstances – annual income under £18,000 – do not allow them to hire legal representation.

Demands should be between £2,000 and £50,000 and only investors who lost money between January1, 1999 and June 31, 2001, would have a right to seek recourse.
Funds would be provided from the state and money returned through successful suits in the form of expenses.

Deputies asked whether the fund would cover investors who have already filed lawsuits and wondered how the state would secure the return of the financial aid.

They also wanted to know the criteria that would be considered in handing over the cash.

The ministry promised to reply the questions in writing while the parties reserved their views until a later date.

The bill is viewed as another attempt by the state to appease the thousands of small investors who lost their lifesavings in bubble shares in 1999.

In February, the Supreme Court declared unconstitutional a law forcing companies that had not been listed on the CSE to return money to investors.

The ruling, which crated a legal precedent, was expected to affect many cases involving the return of money.

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.