Russians, including Putin ally, join bailed-in Bank of Cyprus board

A Cypriot bank which seized depositors savings in March to survive appointed its new directors on Tuesday, giving a key post to a former KGB official who is an ally of Russian President Vladimir Putin.

Shareholders of Bank of Cyprus elected new directors to reflect a new ownership structure at the bank, which converted large deposits to equity to save it from collapse in March.

The bank’s board of 16 individuals now includes six non-Cypriots, mostly Russians, representing individuals who lost considerable amounts of money in the forced conversion to equity of 48.5 per cent of deposits exceeding 100,000 euros (US$132,700).

One of them, Vladimir Strzhalkovsky, nominated by local company Bolestone Trading Ltd, is the former CEO of Norilsk Nickel, the world’s largest nickel and palladium producer. His ties to Putin date back to the days they both served in the KGB.

At a later board meeting, directors voted to appoint Cypriot Christis Hassapis chairman, and Strzhalkovsky vice chairman. Hassapis, a professor of economics, was nominated by the bank’s employees’ pension fund.

Strzhalkovsky received a US$100 million payoff package when he stepped down from Norilsk Nickel in late last year.

Cyprus teetered on the brink of financial meltdown in March as it debated onerous terms of a bailout with international lenders from the EU and the IMF.