Friday, March 29, 2013

Court Injunction Granted to Church Delays Bank Restructuring

Archbishop Chrysostomos II of Cyprus

Under the terms of the Cypriot bailout agreement the shareholders in the Bank of Cyprus will be stripped of their shares which will be transferred to the bank's largest depositors as compensation for the levy or "haircut" on deposits of over 100,000 euros. The Cyprus Orthodox Church, which has vast business interests in Cyprus and is believed to be the island nation's largest landowner, holds 11.6 million shares in the Bank of Cyprus.

The church requests that its shares be treated similarily to deposits that were levied and converted to shares and that the church should be granted shares in the new entity as compensation. The church claims that it is unconstitutional for the state to confiscate its property without compensation. Legal experts have stated that it may be possible to increase the number of shares in the Bank of Cyprus in order to compensate existing shareholders.

Bank restructuring is pending a hearing before court on the matter.

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