Daily Press Review - 27/6/2019

Statutory changes at Hellenic

nomisma.com.cy reported, that the procedure for the amendment of Hellenic Bank’s statute was completed. It reports that older and newer shareholders were called the approve, in the framework of an EGM, nine new amendments to the statute of the company, which are related to the procedures for the constitution of the Bank’s board. It should be noted that the changes will only be approved if there is a qualified majority of 75%. More than 78% of the Bank’s shareholders were represented in the meeting through Representatives or with a proxy of exercise of voting rights. The result of the vote was first given to the CSE and then given to the media. One of the major statutory changes concerns the definition of the independent Board member, which will be in line with the Central Bank’s code of corporate governance. Up until now, Hellenic wasn’t in compliance with the code, and as a result three of its Board Members were considered as independent, while at the same time they were employed by the major shareholders. Another significant change is that of Regulation 108, which stipulates the resignation of all Board Members every year “and if they are willing to act, they will be available for re-election”. Up until today, the bank’s statute stipulated the resignation of 1/3 of the 13-member Board. At the current Hellenic Bank board, only two major shareholders were participating, Wargaming and the American investment fund, Third Point. Last week, a representative of Poppy Sarl, which is linked to Pimco, Kristofer Kraus was appointed to the Board, and will be available for re-election at the AGM on 24 July.

 

Fragile balance at Hellenic Bank

The balance of power at Hellenic Bank’s board is fluid and fragile, in view of the regular meeting of the shareholders that is scheduled for 24 July. Yesterday’s annual general meeting, unanimously approved all the resolutions for the statute, while one resolution didn’t receive 75% of the vote, that was required. The meeting gave a small sample of what the future holds for the Bank’s management. It should be noted, Stockwatch reports, that this is the first time that the five new shareholders of the bank have met, after the share capital increase and the changes in the bank’s shareholder structure. The article reports that the balance of power at the Bank will be incredibly fragile and will depend on how the two major shareholders, Demetra and Wargaming work together. Otherwise, the article reports, the decisions will depend on the alliances of Demetra and Wargaming with the rest of the smaller shareholders. The departing Board of Hellenic Bank, included essentially only two major shareholders. Wargaming and the American Investment fund Third Point. The article reports that Demetra Investment which holds the biggest share percentage of Hellenic Bank (around 21%), has already suggested four independent candidate Board Members. Sources report that all the major shareholders will claim a seat in the bank’s BoD. What remains to be seen, is how the synergies will be shaped and if anyone will back down, so that the Board is represented, at least by the majority of the main five candidates. Sources report that Wargaming, which holds 20.6% of the share capital and is represented by three non-independent board members, will suggest 3-4 candidate members, two of which will be independent. It should be noted that some of Wargaming’s independent board members, are senior employees of the company.



Hellenic: statutory changes adopted, except one

Politis argues that the non-approval of a special resolution on the way that the BoD operates until the new members are approved, should be perceived as the Bank’s way to urge the regulatory authorities to follow faster approval procedures for board members. The special resolution that was not approved – received 70% of the vote, while it required at least 75% in order to be adopted - stipulated: “For so long as the approval of the Central Bank of Cyprus and/or the European Central Bank (each a “Regulatory Authority”) is required for a person to hold the office of director of the Company, a person, other than a Retiring Director, elected to the office of director (the “New Director”), shall not hold the office of director or participate, in any way, in any meeting of the board of directors of the Company (or any committee thereof), without the prior approval of the relevant Regulatory Authority and, accordingly, the appointment of the New Director to the board of directors of the Company shall take effect on the date that such approval is given.” The remaining eight out of a total nine resolutions were unanimously approved, in a procedure that quick, without objections and questions on the part of the shareholders. The resolutions that were adopted stipulate among other: -“independent director” shall have the meaning given to the term “independent member of the management body” or “independent member” (or any other similar term) in any directive issued, from time to time by the Central Bank of Cyprus; “non-independent director” means any director who does not meet the criteria for an independent director. Furthermore, “at each annual general meeting of the Company all the directors (irrespective of when such person was appointed or elected or re-elected as a director of the Company) shall retire from office and shall, if willing to act, be eligible for re-election. The directors who offer themselves for re-election shall be referred to as the “Retiring Directors”.”



Board members to request a vote of confidence every year

Focusing on the resolution stipulating that Hellenic’s board members will be stepping down from their position at each Annual General Meeting, and will have to choice to put themselves up for re-election. In this way Regulation 108 of the Articles of Association of the Company was amended so that at “At each annual general meeting of the Company all the directors (irrespective of when such person was appointed or elected or re-elected as a director of the Company) shall retire from office and shall, if willing to act, be eligible for re-election”. The board members that will depart will be referred to as “Retiring Directors”, as the Resolution mentions. The Extraordinary Meeting also unanimously approved the amendment of Regulation 109 of the Articles of Association of the Company, so that “each Retiring Director and each other person nominated for the position of a director of the Company proposed at an annual general meeting shall be voted upon a separate resolution taken as a poll”. It should be noted that the EGM rejected a proposal that stipulated the appointment of temporary Board members, for the period that the Bank is expecting approval by the regulatory authorities. The resolution was passed by 70% of the participating shareholders, but a qualified majority (75%) was required for its approval.

 

Erdogan more challenging after defeat – Issuance of new NAVTEX

Phileleftheros reports that following the elections defeat of last Sunday, Recep Tayyip Erdogan is turning his attention towards the Eastern Mediterranean and is more provocative on the energy issues in the Cyprus EEZ and the Eastern Mediterranean. According to the paper, Erdogan's stance is quite indicative of Ankara's goals in the Eastern Mediterranean and mainly in the Cypriot EEZ.  It is also considered a provocative response to the European Union’s warnings. ‘Until we ensure the fair sharing of hydrocarbons, we will continue our activities,’ the Turkish president said. He again addressed France, saying that ‘France cannot talk about the Cyprus gas because it is not a guarantor country’. Erdogan's statements were made during his first speech following the Istanbul elections before the Justice and Development Party's parliamentary group. In his speech, Tayyip Erdogan said that "until we have assurances that the hydrocarbons found already or will be found in the Eastern Mediterranean will be fairly shared, we will carry on our activities in the region." He went on to say "You see, in this area we will never allow initiatives that ignore the law, the rights and interests of Turkey and the Turkish Cypriots in the search for oil and gas," he said. In addition to the statements, Turkey yesterday issued a new NAVTEX restricting areas of the Cyprus EEZ, for the period from July 2 to July 17. Athens and Nicosia believe that after Antalya the drilling ship Yavuz will head to the bay of Famagusta, where it is scheduled to conduct a new drilling.



Pharmacists complain and raise questions about the leadership

Pharmacists of the private sector are complaining about various problems they encounter now that they are registered with the GHS. In their written statement they record many of their problems, such as overprescribing, prescribing medication which is low in stock as well as the lack of therapeutic protocols etc.  They claim that this situation is troubling for their pharmacies’ viability.



Chaos in state hospitals

OKYPY is considering alternative solutions, in order to staff accident & emergency departments (A&E). Doctors in state hospitals continue to resign in alarming rates. In total, 35 doctors quit over the last months in order to join the GHS as private practitioners. Yesterday, the resignation of two paediatric-cardiologists from the Makarios Hospital came as a shock, since from 1 July onwards, Makarios Hospital will not have any paediatric-cardiologists. According to Politis’ sources, 3 more doctors left the state hospital of Paphos.