NICOSIA - The heat is on for Bank of Cyprus whose new board of directors will be elected today at its Annual General Meeting at the Philoxenia Hotel in Nicosia.
“There are a lot of preparations underway, it is a very big day for the bank whose new board members should be announced by 8:30-9:00pm,” an insider told The Cyprus Daily yesterday.
“The counting of the votes will be tedious because of the positive but also negative votes. Quite a big number of shareholders are expected to show up,” added the insider.
Nonetheless, it is still uncertain what its largest shareholder – collapsed Laiki Bank which was absorbed by BoC in March – will do.
It has not proposed a candidate for the 18-seat board at the instructions of the new resolution authority comprising of the Finance Ministry, the Securities and Exchange Commission and the Central Bank of Cyprus.
“We are absolutely in the dark as to the moves of the resolution authority. We are trying to be positive, we have proposed candidates but we don’t even have half a vote in our hands,” Adonis Papaconstantinou who heads the association of Laiki depositors told us.
A total of 49 candidates are interested to join the new board of the island’s biggest lender which exited a resolution regime in July.
Among them are seven Russian and Ukrainian shareholders, proposed by legal firms on the island representing them.
The law firms representing them are those of Vassiliades, Anastasiades, Scordi & Papapetrou and the audit firm Tsielepis.
They are said to meet the criterion of independence, and most of them have an international career in finance.
The evaluation of candidates is based on new criteria so as to be in line with a bill voted in parliament last week on bank governance.
It includes a provision that “the total value of lending to any board member at any time must not exceed the amount of €500,000”.
Candidacies include 12 of the 14 interim board directors, and the association of Laiki depositors proposed six – including Papaconstantinou.
BoC’s share capital amounts to €4.7 billion, 81.4% of which is owned by 21,000 depositors-turned-shareholders due to the bail-in in March. And another 18.1% is owned by the collapsed Laiki.
Old shareholders and capital security holders are limited to a 0.5% stake.
Only four women are candidates and the person tipped to be the new chairman of the board is businessman Mike Spanos. He was a Central Bank board member but stepped down last week because of his BoC candidacy.
Cyprus has signed a contract with PricewaterhouseCoopers to look into a privatisation strategy for state-owned firms.
International lenders have identified a telecoms company, the dominant electricity operator and seaport operators as potential privatisation targets. PWC will look at the legal and institutional framework for privatisations over the next 60 days.
Under the terms of a €10 billion bailout agreement, Cyprus must present a list of state-owned enterprises by the end of 2013. How to privatise them will depend on the nature of the assets.
A progress report compiled by lenders said Cyprus was committed to considering the privatisation of companies in key sectors of the economy, including Cyta telecoms, the electricity authority and commercial activities at ports.