24/11/2003 09:33
According to a survey carried out by StockWatch, the accumulated legal actions and claims against CSE-listed companies for the past four years have reached £69 million. Most actions have been filed by shareholders who for a number of issues, including the return of funds, the failure to issue securities and inaccurate statements in the Prospectuses.
Legal actions
In the past four years, hundreds of legal actions have been filed against 32 listed companies, the majority of which are still in courts. It is noted that several legal actions do not concern the CSE (disputes between suppliers and associates, state tax claims etc). Most of them, though, are directly filed by investors, who blame listed companies for the millions in losses they incurred during the stock market boom of 1999-2000.
Brokerages on court
A large number of the suited companies are brokerages houses or investment companies. The largest claims have been filed against Sharelink for its subsidiary, White Knight, against which there are law suits of £1.8 million for cash return and investor claims totaling £18 million. By the first half of 2003, claims for cash returns amounted to £21 million. A group of investors has also filed a legal action of £13.1 million against White Knight.
Legal actions are also pending for MarkeTrends (£1.6 million), CLR (£1.2 million), SAFS (£0.6 million), Laiki Investments (£0.6 million) and ProChoice (£220,000).
As regards to the investment companies, the legal claims against Elma Holdings by the Cyprus Popular Bank total £6.2 million. Elma requests, in turn, a compensation of £12.5 million by the Popular Bank for the Kyknos case.
There are also claims of £0.8 million against CyVenture by shareholders “who claim that they have been misled by statements included in the Company’s Prospectus”. As the daily Politis revealed last week, one of the law suits, regarding the issue of securities, has been won by an investor and CyVenture will have to pay £27,000.
Legal actions for the non issue of titles
According to the survey, there are several pending legal actions against Claridge. According to the annual report 2002, the pending actions have reached £765,720 and concern “the omission on behalf of the Company to issue and allocate titles”.
19 actions against GLC
There are also 19 legal actions against GLC, which exceed the amount of £10 million. The largest action has been filed by Cylink (£6.5mln), followed by Metaxas, Loizides, Syrimis & Co (£1mln) and CLR Investment Fund (£1mln). The latter is yet to file an explanatory report that usually accompanies the law suit.
Failure to return money
Several actions or claims concern the return of money to investors. There are 3 legal actions and 224 claims of £2.3 million against CPI. According to StockWatch survey, one third of the pending legal actions and claims against the 32 CSE-listed companies concern the return of money, pursuant to Laws 42(I)2000, 141(I)2000, 9(I)2001 and 168(I)2002. The first of these laws has been declared unconstitutional in the cases of Lapertas and Cyber Group.
SEC: Proper disclosure to investors
Invited to comment on the latest figures concerning the pending legal actions and claims, Chairman of the Securities and Exchange Commission, Marios Clerides said that there is a need of proper disclosure to investors.
In most cases, the legal advisors of the listed companies advised their Board of Directors that there is no need to proceed to the relevant provisions for compensations in the companies' accounts. On the question whether the legal advisors act to the benefit of the shareholders, Mr. Clerides said that “there is no proof whether lawyers act responsibly or irresponsibly. It is very important that the court clarifies a number of issues” so that everyone knows where he or she stands.
It is worth noting that certain companies in their annual reports do not refer to the pending legal actions against them.
The Listed Companies’ Association was unavailable for comment.
Legal actions
In the past four years, hundreds of legal actions have been filed against 32 listed companies, the majority of which are still in courts. It is noted that several legal actions do not concern the CSE (disputes between suppliers and associates, state tax claims etc). Most of them, though, are directly filed by investors, who blame listed companies for the millions in losses they incurred during the stock market boom of 1999-2000.
Brokerages on court
A large number of the suited companies are brokerages houses or investment companies. The largest claims have been filed against Sharelink for its subsidiary, White Knight, against which there are law suits of £1.8 million for cash return and investor claims totaling £18 million. By the first half of 2003, claims for cash returns amounted to £21 million. A group of investors has also filed a legal action of £13.1 million against White Knight.
Legal actions are also pending for MarkeTrends (£1.6 million), CLR (£1.2 million), SAFS (£0.6 million), Laiki Investments (£0.6 million) and ProChoice (£220,000).
As regards to the investment companies, the legal claims against Elma Holdings by the Cyprus Popular Bank total £6.2 million. Elma requests, in turn, a compensation of £12.5 million by the Popular Bank for the Kyknos case.
There are also claims of £0.8 million against CyVenture by shareholders “who claim that they have been misled by statements included in the Company’s Prospectus”. As the daily Politis revealed last week, one of the law suits, regarding the issue of securities, has been won by an investor and CyVenture will have to pay £27,000.
Legal actions for the non issue of titles
According to the survey, there are several pending legal actions against Claridge. According to the annual report 2002, the pending actions have reached £765,720 and concern “the omission on behalf of the Company to issue and allocate titles”.
19 actions against GLC
There are also 19 legal actions against GLC, which exceed the amount of £10 million. The largest action has been filed by Cylink (£6.5mln), followed by Metaxas, Loizides, Syrimis & Co (£1mln) and CLR Investment Fund (£1mln). The latter is yet to file an explanatory report that usually accompanies the law suit.
Failure to return money
Several actions or claims concern the return of money to investors. There are 3 legal actions and 224 claims of £2.3 million against CPI. According to StockWatch survey, one third of the pending legal actions and claims against the 32 CSE-listed companies concern the return of money, pursuant to Laws 42(I)2000, 141(I)2000, 9(I)2001 and 168(I)2002. The first of these laws has been declared unconstitutional in the cases of Lapertas and Cyber Group.
SEC: Proper disclosure to investors
Invited to comment on the latest figures concerning the pending legal actions and claims, Chairman of the Securities and Exchange Commission, Marios Clerides said that there is a need of proper disclosure to investors.
In most cases, the legal advisors of the listed companies advised their Board of Directors that there is no need to proceed to the relevant provisions for compensations in the companies' accounts. On the question whether the legal advisors act to the benefit of the shareholders, Mr. Clerides said that “there is no proof whether lawyers act responsibly or irresponsibly. It is very important that the court clarifies a number of issues” so that everyone knows where he or she stands.
It is worth noting that certain companies in their annual reports do not refer to the pending legal actions against them.
The Listed Companies’ Association was unavailable for comment.
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