Cypriot trade union seeks post of Hellenic Bank board: report

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NICOSIA, June 11 (Xinhua) -- A trade union is seeking a post on the board of directors of Hellenic Bank, raising alarm among foreign stockholders, a reliable economic news site reported on Tuesday.

StockwatchCy, a reliable and well informed Cypriot economic news site, said in a report that the prospect of the participation of a trade union on the board of the bank was considered by the foreign stockholders as an unthinkable development.

To make things worse, the trade union, ETYK, represents bank employees and it is in a collision course with the board over pay demands, StackwatchCy said in the report.

It is the first time that a trade union is trying to get a post of power in any large financial corporation with which it is dealing from opposing positions.

The demand came as the holders of Hellenic Bank shares are preparing to elect a new board after a recent restructuring of the shares which came out of a capital increase by Hellenic Bank.

The lender became the largest retail bank in Cyprus, following its acquisition of the assets and performing loans of the former nationalized Cyprus Cooperative Bank.

The capital increase by Hellenic Bank, which was part of the agreement for the acquisition of Cooperative Bank led to the purchase of Hellenic Bank shares worth 10 million euros (11.3 million U.S. dollars) owned by the European Bank of Reconstruction by Demetra Investments Ltd.

Demetra increased its share in Hellenic Bank from 18.2 percent to 21.01 percent, pushing the largest shareholder, Wargaming Group, to second position with 20.6 percent of the lender's shares, down from 24.92 percent previously.

According to the Cyprus Exchange and Securities, the three other big shareholders in Hellenic Bank are Poppy Sarl of Luxembourg (a PIMCO affiliate), with a 17.30-percent share, American Third Point Hellenic Recovery Fund LP with 12.59 percent (down from 26.2 percent) and Cypriot investment fund 7Q Financial Services Ltd, with a 9.99 percent share.

An ETYK official said at the annual meeting of the trade union on Saturday that it had acquired "an important package" of Hellenic Bank share through 7Q Financial Services Ltd with money which came from the bank employees Provident Fund.

StockwatchCy said that if ETYK is successful in its bid to get a seat on the board, it will make things more difficult for large shareholders as at least 50 percent of the board members, excluding the chairperson, must be independent.

That means that there are only 4 seats up for grabs by the five bigger shareholders on the 13-member board of the bank, given that two of its members are the two top executive officials of Hellenic-the Chief Executive Officer and the Executive Director.

ETYK is currently at odds with the board of Hellenic over demands to restore cuts in salaries and other benefits imposed as part of the 2013 bailout of Cyprus and the resolution of the banking system. Enditem

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