Marfin Investment Group SA filed a complaint against Cyprus in relation to an 823 million-euro ($1.1 billion) investment in Cyprus Popular Bank Plc., saying the lender shouldn’t have been nationalized.
“We are asking for our investment to be protected,” MIG Chairman Andreas Vgenopoulos told reporters in Athens today. “Because of the difficult situation Cyprus is in, we are starting by asking for restitution of private ownership plus damages which can’t be covered by this.”
Cyprus’s government became Cyprus Popular’s largest shareholder, with an 84 percent stake, in July of last year after it underwrote a 1.8 billion-euro share capital increase, as part of moves to shore up the banking system, which was hard-hit by participation in Greece’s sovereign debt writedown. Central Bank of Cyprus Governor Panicos Demetriades said in October that the move would lead to a public debt spike in 2012.
Participation in Greece’s sovereign debt restructuring “destroyed” Cyprus’s banking sector and officials should have asked for written guarantees of support from euro-area finance ministers in exchange for signing up for voluntary losses “blindly,” Vgenopoulos said.
In June, Cyprus became the fifth euro-area nation to request a rescue, after Cypriot banks lost more than 4 billion euros from the writedown of Greek debt they held.
“One of the biggest mistakes I have made in my career as a businessman” was to keep the bank headquartered in Cyprus in 2009, Vgenopoulos said. The decision was taken “under a lot of pressure from the Cypriot state,” he said.
Vgenopoulos said if no agreement is reached, MIG will take the case to the International Arbitration Tribunal.