THE Bank of Cyprus' old shareholders have the right to be reimbursed for losses that resulted from the bank's restructuring decisions taken last year, DISY spokesman Prodromos Prodromou said on Tuesday. Numbering approximately 88,000, the bank's old shareholders saw their shares' value diminished to 1 per cent in March 2013 when the bank was restructured following a conversion of 47.5 per cent of uninsured deposits into equity, the absorption of failed Laiki bank and the selling off of the bank's Greek operations to Piraeus bank. Following a meeting between DISY leader Averof Neophytou and the old shareholders' association, Prodromou hinted at the unfairness of their predicament and expressed the need to compensate them for their losses. "The procedures followed in the spring of 2013, the decisions taken on issues that are still debatable to this day, have left a sense of unfair treatment primarily to the bank's old shareholders but also to depositors and bondholders," he said. At the meeting, various proposals that could satisfy shareholders' demands were tabled, including granting them rights to the BoC's significant property in the occupied area – worth an estimated €1 billion – and their right to the profit of €1.9 billion resulting from the absorption of Laiki's assets, which the bank has removed from its accounts. Prodromou linked the old shareholders' right to property in the occupied areas with the ongoing efforts to solve the Cyprus problem. "These properties do not show on the bank's balance sheet as they are recorded at zero value," he said. "Last year's decisions should have granted rights to them to the bank's traditional shareholders." "When the time comes for these properties to hold their fair value the state should painlessly restore part of the loss the shareholders have suffered." Prodromou said that his party will bring the issue to the House for discussion with other parties, aiming at coming to an arrangement that would undo the unfairness done to the shareholders. "There are ways to restore the injustice without burdening the bank, or the banking system," he said. On behalf of the association, deputy head Eleftherios Ioannou said that the delegation has put forth the challenges faced by the bank's old shareholders. "We feel that, as a group, the BoC's old shareholders were treated extremely unfairly during the turbulent time from March to July 2013, and that this unfairness must be reversed," he said. Ioannou said that DISY's leader had been fully supportive and had already noted the issues raised by the association. "The main problem is that, while the BoC had its own capital and was in a position to deal with its problems by selling assets, it was restructured nonetheless, for reasons not directly having to do with the bank itself, but rather with facing the challenges posed by Laiki's failure – dealing with Laiki's guaranteed deposits, which needed to be transferred to another bank, and its €9.1 billion [of Emergency Liquidity Assistance] that was also dumped on the Bank of Cyprus," Ioannou said. "Also, the Cypriot bank's Greek operations were effectively given away for free, causing huge losses to the BoC and the wider economy," he added.
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