Battling it out for the Bank of Cyprus control

The equilibrium of power in the new Bank of Cyprus is still a mystery, as the decisions on the future of the country’s only large lender following the demise of Laiki Bank, have created “a complex legal problem”.

Former depositors in Laiki now hold 18% of BoC new shares, followed by Russian and Ukrainian companies. Unofficial estimates say that foreign entities hold around 16% of the shares. This concerns Bank of Cyprus clients whose uninsured deposits (47.5% of them) turned into equity only a few days ago. The Eastern Europeans and also quite a few of the Laiki block are represented by prominent Cypriot law firms.

The picture gets even more complicated since the lion share of the shares, that 18%, is currently under the control of the Laiki’s administrator, put in that place by the island’s Central Bank.

All these mean that in the background shareholders and their representatives have started pushing for terms that would lead to a bigger say on the control of the bank, in view of the September election for the new board. Even the Archbishop, regretting what he described as attempts by some people to put the lender under their control, revealed that he is considering asking smaller shareholders to have him as their representative.

On the part of the Laiki originated shareholders, it’s still under consideration whether the administrator could or should hold on to the shares or let individuals and/or groups take control of their interest in the bank, as legal representatives have argued.

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