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The Bank of Cyprus Group, the island’s biggest lender that exited solvency after being forced to merge with the failed Laiki Popular Bank earlier this year, will hold the first annual general meeting of its new shareholders on Tuesday, September 10, having recapitalised the bank by 8 bln euros using money from unsecured depositors.
The meeting will be held at the Filoxenia conference centre in Nicosia at 4pm, the biggest venue suitable considering the controversial issue of the bail-in decision imposed by the Eurogroup in March as part of a rescue package for Cyprus.
The AGM will deal mainly with the selection of a new board of directors and their remuneration, as the other two items on the agenda, review and approval of the accounts for 2012 and appointment of auditors will be postponed to an extraordinary meeting (EGM) probably at the end of November. By then, the bank’s new board may also have the consolidated Group accounts, including the merged Laiki Popular operations, for the first half of 2013.
Representatives from five law and audit firms representing major uninsured depositors met with Central Bank Governor Panicos Demetriades earlier this week to discuss their client’s say and share on the new Bank of Cyprus board.
The law firms of Christodoulos Vasiliades, Andreas Neocleous, Skordis & Papapetrou and Nicos Anastasiades, as well as the audit firm Costas Tsielepis, representing shareholders with more than 1.5%, say their clients, who held large deposits in the resolved Laiki Popular Bank, want to be represented on the new Bank of Cyprus board.
Laiki ‘legacy’ holders, representing an 18% stake in the recapitalised Bank of Cyprus, argue that Central Bank-appointed administrator Andri Antoniadou cannot vote or take decisions on behalf of the whole block.
Central Bank technocrats were quoted by the state-owned Cyprus News Agency as saying the 18% shareholding issue is a legal ‘headache’ that the supervision authority had ‘inherited’.
Former BOCY board member and chairman of the Cyprus Institute of Directors (IoD) Evdokimos Xenofontos wrote to the Central Bank Governor suggesting that proxies should be given to the uninsured depositors and other ‘bad’ Laiki creditors to enable them to vote for the new directors.
Former Attorney General Alecos Markides, representing the remaining Laiki Legacy holders, SYKALA, said that it was possible to have a common body to act on behalf of all former Laiki depositors, while SYKALA president Adonis Papaconstantinou said the aim was to have a say in future decisions and hopes to have a new meeting with Governor Demetriades on August 20.
The Central Bank, in its capacity as the Troika-appointed resolution authority, had appointed an interim board in May, headed by former Central Bank official Sophocles Michaelides, who in turn appointed international banker Christos Sorotos as CEO of the bank in charge of recapitalising and restructuring it. As a result, a voluntary redundancy package was offered to 1,370 staff who left and the new management team is reviewing all assets and liabilities. It is believed that Sorotos may consider staying on and continue the work already underway if the new shareholders and board members wish him to do so.
The interim board members are Erol Riza, Lenia Georghiadou, Constandinos Damtsas, Michalis Zannetides, Yiorgos Theocharides, Philippos Mannaris, Lambros Papadopoulos, Andreas Persianis, Andreas Poiitis, Panicos Pouros, Savvakis Savvides, Takis Taoushanis and Takis Hadjipapapas. If they wish to be candidates for reappointment, they should inform the Company Secretary in time for the final list of potential board members to be announced on September 5.
The remuneration for the interim and new board members has already been reduced in line with universal pay cuts within the Group, with the chairman’s fee lowered to 68,000 euros a year, the vice chairman to 51,000 euros and non-executive members to 13,000 euros. Committee members and chairs will be reimbursed with an additional amount ranging from 2,100 euros a year to 6,300 euros.
