Αυτούσια η επιστολή προς την κα. Χρυστάλλα Γιωρκάτζη:
Dear Chrystalla,
In my opinion it was not at all wise on the part of the Central Bank to agree that the Bank of Cyprus should go through the Pan European stress test at this point of time when the Bank is in the process of recovering from the massive traumas imposed on it in March 2013.
If the Central Bank agreement or decision as above is not reversible, in which case the Bank will temporarily need extra buffers of capital over and above its normal requirements, in my opinion the extra capital temporarily required should be injected by the Government itself showing its commitment and support of its Banking System.
This capital injection can be either in the form of redeemable preference shares, or through the issue of ordinary shares at 24 cents per share coupled with a parallel issue of warrants to the existing shareholders pro rata to their holding entitling the shareholders to buy back from the Government the shares they would be entitled to at pre-agreed prices.
If the Troika does not allow the Government to use third party borrowings to do the above perhaps this temporary capital injection can be financed by the Bank itself.
The advantage of the above suggestion is that (a) the control of the Main Bank of the Country is not abdicated to some foreign Hedge Funds, (b) the future prosperity of the Country and of its Economy will remain in the control of its people and (c) the waiving of the shareholders rights will be reversible.
While on this subject, I wish to point out that the Central Bank, acting as trustee of the BoC shareholding now held by the Legacy Laiki, it cannot vote in favour of the capital reduction and/or waive the pre-emption rights of that shareholding without the prior concurrence of the beneficial owners of those shares. In my opinion such action on the part of the Central Bank would be in breach of trust.
Kind regards
Evdokimos
