THE TOP court in the country yesterday paved the way for investors to have money lost in the 1999-2000 Cyprus stock exchange (CSE) fiasco returned through the civil courts.
Thousands of small investors lost their lifesavings in bubble shares between 1999 and 2001. Last February, the Supreme Court delivered a blow to investors by declaring unconstitutional a law forcing companies that had not been listed on the CSE to return money to investors. The ruling, which created a legal precedent, was expected to affect many cases involving the return of money.
Yesterday, in a separate ruling, the Supreme Court found that investors could seek the return of money from non-listed companies through civil proceedings based on a separate piece of legislation.
The top court set a new precedent after rejecting an appeal by Investylia from Larnaca regarding a district court decision ordering them to return £12,020 to Livadhiotis Bros Investments.
Livadhiotis paid £12,020 for shares to Investylia in 2000. Investylia had applied to be listed on the CSE that same year but was rejected, leaving the investors with non-tradable shares.
When Livadhiotis sued Investylia for the return of their money in 2002 plus interest, they won. Investylia then appealed to the Supreme Court, arguing the law on which they based their case was unconstitutional.
However, the top court rejected the appeal, paving the way for investors to bring lawsuits against companies for the return of money lost during the financial fiasco.
Lawyer for Livadhiotis, Tasos Coucounis, said after the ruling: “It’s a revolution and certainly a precedent for investors seeking their money back.”
Coucounis noted that this was the first Supreme Court decision based on article 58(A) 3(b) of the stock exchange law.
“The article provides that after buying shares of a company with the promise that they will be listed on the stock exchange, and they are not, the buyer can seek money back from the company with interest,” he said.
Referring to the Supreme Court’s controversial decision last February, Coucounis clarified that the decision dealt with the unconstitutionality of article 168, which criminalised the non-return of money.
“You can’t make it an offence not to return money. But (yesterday) the Supreme Court ruled that article 58 was constitutional, sending a message to all investors that they can still get their money back through lawsuits, not criminal proceedings,” he said.
“With this decision, the court is basically saying if you file a lawsuit, not criminal proceedings, based on article 58, you stand a good chance of getting money back. It’s a revolution.
“We were amongst the first to file a case based on this provision. I now call on all investors to look at this article, see if they are eligible and file a lawsuit,” added Coucounis.
