Supreme Court rules in favour of Marfin

as the Cyprus SEC loses credibility

 

The Cyprus Supreme Court has overturned a previous decision of the Cyprus Securities & Exchange Commission in the takeover saga between Marfin Popular Bank and Piraeus going as far as saying that the SEC is not entrusted in deciding which takeover bid ranks as first and in imposing penalties on MPB.

The SEC had previously ruled that MPB submitted a takeover bid seeking control of Bank of Cyprus and Piraeus as a defensive move, and thus it ordered the Bank to pull back, stop from any takeover activity until the Piraeus bid is first finalized and at the same time imposed a CYP 10.000 administrative fine.

The Supreme Court, after a recourse by Marfin overturned all the decisions taken by the SEC, and in a way has placed the whole credibility of the SEC on the line, since one of the key powers entrusted to it has been stripped.

The Supreme Court decision means that the final decision will be taken by the Council of the Cyprus Stock Exchange, which in most likelihood may well decide to allow all bids to run at the same time.

The SEC had already admitted that it had a weak case after it back-pedalled Wednesday, playing down its recent move to declare the bid by MPB for Piraeus Bank and the Bank of Cyprus null and void.
The regulatory body called its move a “recommendation” rather than a ruling.
MPB suffered a setback last week when it was ordered by the SEC to cease and withdraw its offer, reasoning that Piraeus’ bid had come first. The ruling gave Piraeus the edge, because it gave the Greek bank a grace period during which it might build up its defences ahead of MPB’s comeback.
Evidently on the advice of their lawyers, an unsure SEC found itself recoiling, calling its prior decision a recommendation. Still, to many observers, that raised the question as to why, if that were the case, the regulatory body had also slapped a fine on Marfin.
After hearing both sides, the Supreme Court adjourned until today, when it will rule on the matter.