FBME Ltd, the holding company of FBME Bank, has said it will sue the Cyprus Central bank for any damage and losses suffered by the lender, its depositors and owners. FBME (Cyprus) was taken over by the Central Bank after money laundering allegations were made by the US Treasury Department on 17th July.
“Those persons considered responsible include but are not limited to the special administrator appointed by the Central Bank to control the operations of the Cyprus branch of FBME Bank. Resolution powers have been imposed against the Cyprus branch of the Bank, whereas those powers were designed only for institutions facing insolvency, not healthy banks such as FBME.”
The shareholders are seeking a legal solution to the actions of the CBC and its administrator, in line with protection afforded under Cypriot, EU and international law.
Last week, the shareholders filed a request for arbitration with the Arbitral Tribunal of the International Chamber of Commerce to counter the unilateral decision of the CBC to sell FBME Bank’s Cyprus branch.
The CBC said it was selling the branch to protect depositors and prevent contagion after correspondent banks froze and or closed the branch’s US dollar accounts and have suspended transfers on behalf of the branch.
The lender denied the allegations and described the CBC’s move as a hostile take over, and although the stated intention of the Central Bank has been to expropriate the Cyprus branch and to sell it to outside interests against the wishes of its owners, it’s actions are looking increasingly inept.