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Bank of Cyprus Annual General Meeting and election of Board of Directors

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The annual general meeting (AGM) of Bank of Cyprus was held on 10 September 2013. The AGM was attended, either in person or by proxy, by 3,549 shareholders who in total represent 53.62% of the total share capital.

The AGM commenced with a speech by the Chairman of the previous Board, Mr. Sophocles Michaelides, in which he outlined the events that led to the current situation and briefly set out the measures adopted by the transitory board of directors in order to reduce the bank’s costs. Mr. Michaelides pointed out that the number of Bank of Cyprus branches has been reduced from 203 to 166, that staff numbers have been reduced by around 25%, and that the new board that will be elected will have to adopt even further measures, a number of which are outlined in a report prepared by McKinsey consultants. He stated the fact that as of 30 July 2013 Bank of Cyprus is no longer in a state of resolution.

Mr. Michaelides handed over the microphone to Bank of Cyprus’ Chief Executive Officer, Mr. Christos Sorotos. Mr. Sorotos gave an account of the way in which they tried to address the problems facing the bank. The two principles that guided them in this endeavor, he noted, were those of consensus and best practice. The bank has accordingly opened all meetings of the board to the Ministry of Finance, veto powers have been introduced to the board of directors, and they have increased the separation of powers. Mr. Sorotos emphasized the fact that Bank of Cyprus is today the only systemic bank of Cyprus. He stated that it is important for the bank that the credit rating of the Republic of Cyprus be improved and that there be better management of loans granted by the bank.

Mr. Sorotos moved on to state that Bank of Cyprus is now a new bank. He stated that the value of the bank is not just profits but also relates to the fact that “it is impossible to build such a bank again in the future.”

Questions and answers followed in which many objections were raised. One main objection related to the new constituency of shareholders. Another objection related to the fact that the AGM was convened without any financial accounts having been finalized. The Board replied that the constituency of shareholders was not a decision of the board of directors and that, in any case, a person wishing to challenge this new constituency should do so in Court. In relation to the objection relating to financial accounts, the Board stated that it was not possible for the auditors to finalize the accounts before the AGM while at the same time the AGM had to be held before 12 September 2013. 12 September 2013 is the date before which, according to Cyprus’ Eurogroup memorandum, the bank must be handed over to its shareholders. For this reason, they explained, they decided to split the AGM into two meetings. On the first meeting, i.e. on 10 September 2013, a new board would be elected while soon after a second would be held in which the financial accounts would be presented.

Some shareholders exited the room inviting others to follow their example. Only a few followed.
The shareholders proceeded to vote on the proposed items and by ordinary resolution:

  1. Approved the adjournment of the business to receive and consider the Directors’ report and the Consolidated Financial Statements for the year 2012, and decided to deal with this business in an adjourned meeting which will take place by the end of November 2013 and for which a relevant notice will be sent to the shareholders.

  2. Approved the adjournment of the business to appoint the auditors and their remuneration, and decided to deal with this business in an adjourned meeting which will take place by the end of November 2013 and for which a relevant notice will be sent to the shareholders.

  3. Approved the remuneration of the members of the Board of Directors.

  4. Elected the following to the Board of Directors:
  • Anjelica Anshakova;
  • Dmitry Chichikashvili;
  • Christis Hassapis;
  • Costas Hadjipapas;
  • Marios Kalochoritis;
  • Konstantinos Katsaros;
  • Erishkan Kurazov;
  • Igor Lojevsky;
  • Adonis Papaconstantinou;
  • Anton Smetanin;
  • Vladimir Strzhalkovskiy;
  • Xanthos Vrachas;
  • Marinos Yialelis;
  • Marios Yiannas;
  • Andreas Yiasemides;
  • Ioannis Zographakis;

Following their election, the abovementioned members convened a meeting and elected Mr. Christis Hassapis as the Chairman of the Board and Mr. Vladimir Strzhalkovskiy as Vice-Chairman.

All the above members of the Board of Directors are subject to approval by the Central Bank of Cyprus.

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