Archbishop Chrysostomos, head of the eastern Orthodox Church of Cyprus and an outspoken social and political activist, urged his fellow Cypriots to reject a $1 billion Bank of Cyprus share sale deal led by American Wilbur Ross. The archbishop spoke on state radio Wednesday, July 20th, about the deal to be voted on at an extraordinary general meeting of shareholders scheduled for August.

Archbishop Chrysostomos Bank of Cyprus

Statement from Cypriot Archbishop Chrysostomos

“We have seen mistakes piled upon mistakes and illegalities on top of illegalities (during the bank’s restructuring),” Archbishop Chrysostomos, head of the eastern Orthodox Church of Cyprus, told state radio yesterday.

“All Bank of Cyprus shareholders, old and new, are called on to vote against the planned capital increase unless the bank agrees to restore the old shareholders along the lines of our proposals,” said the archbishop, who serves on the board of a Bank of Cyprus shareholder pressure group.

The Orthodox Church was among the largest shareholders in the bank before the financial collapse a few years ago, owning more than 3% of the bank’s shares and holding several seats on the BoD.

The very popular Archbishop Chrysostomos is known for his “hands-on” approach to protecting church interests, which include from a major stake in the island’s largest brewery to a number of luxury hotels as well as large tracts of real estate. Chrysostomos has recently been working on a project to build Cyprus’s largest tourist resort on land owned by the church.

Bank of Cyprus deal seen as unfair

The older shareholders (who had their deposits forcibly turned into shares of the bank) argue that the value of their shares should be fully restored by recognizing the €1.8 billion profit made by Bank of Cyprus from its takeover of Laiki Bank last year.

“Alternatively, the shareholders could be compensated by being granted property in [Turkish-held] northern Cyprus, which is held at zero value on the bank’s books but could acquire considerable value in the future if there is a settlement,” said Kypros Chrysostomides, an attorney advising the shareholders.

Chrysostomides continued to say the old shareholders were now looking at “a second equally unacceptable dilution” given the new shares would be sold at €0.24 each compared with the €1 calculated when the bail-in of depositors took place just last year.