IoD Cyprus wants compulsory adoption of corp. governance code

The Institute of Directors of Cyprus has sent a letter to the Cyprus Stock Exchange (CSE) demanding the compulsory adoption of the CSE’s Corporate Governance Code.

IoD Cyprus Chairman Evdokimos Xenofontos in an open letter to the CSE and the Securities and Exchange Commission (SEC), stressed the aim of the corporate governance code is to strengthen the monitoring role of the boards of directors, to protect small shareholders, to adopt greater transparency and to provide timely information, as well as to safeguard the independence of the boards of directors in their decision-making.
Companies should state in the first part of the report whether the principles of the code are being implemented and should confirm in the second part of the report that they comply with the principles of the code and, in the event that they do not, should give reasons.

Xenophontos insists that companies should “comply or explain” the reasons why they have not adopted the code and is against the CSE’s decision to allow different approaches by companies listing in the Main Market, where implementation of the code is compulsory, partially for Parallel market stocks and non-compulsory for those listed in the Alternative Market.

He cited the case of Alkis Hadjikyriakos (Frou-Frou Biscuits), which having listed in the CSE’s Alternative Market is not implementing the corporate governance code.

The company has been asked by a minority shareholder to discuss the issue at its forthcoming AGM.

Xenofontos said that before being listed on the CSE, Frou Frou was a family-owned company with the 52% majority stake held by its Executive Chairman, Alkis Hadjikyriakos, his sister and Executive Vice Chairman Nora Dikaiou with some 17%, and the remainder held by other shareholders.

According to a statement sent to the CSE, Dikaiou said her brother threw her out of the company over her insistence to adopt the corporate governance code.
“He (Alkis Hadjikyriakos ) did not allow the Vice Chairwoman to inspect the company’s books and refused to provide information and analyse the company’s financial statements,” Xenophontos said.
Xenofontos is calling on the CSE and SEC to demand that listed companies comply with the code or take appropriate measures to force majority shareholders to buy out small shareholders.
“The code was made to protect minority shareholders. Either they comply with each provision or explain why they have not and what steps are being taken to rectify it.”