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Cyprus Mail: News Articles in English, 98-09-20

Cyprus Mail: News Articles in English Directory - Previous Article - Next Article

From: The Cyprus Mail at <>

Saturday, September 19, 1998


  • [01] 'A classic case of bribery'
  • [02] Optimistic growth prospects at threat from global crisis
  • [03] Japanese second-hand cars flooding the market
  • [04] Weddings and telegrams
  • [05] More icons stolen than originally thought
  • [06] Man dies on plane

  • [01] 'A classic case of bribery'

    By Charlie Charalambous

    THE ADMISSION by Interior Minister Dinos Michaelides that he bought luxury flats from building contractors at below the market price was termed a "classic case of bribery" by his accuser Christos Pourgourides yesterday.

    "Everything that he (Michaelides) has admitted has completely underlined the validity of my allegations," Pourgourides said during a Radio Proto interview yesterday.

    The Disy deputy hit back at the minister, whom he accuses of becoming a multi-millionaire during his term in office, after Michaelides on Friday denied all the allegations made against him.

    Before leaving for New York, President Clerides publicly backed his minister, but Pourgourides yesterday said this was before Michaelides gave his less-than-convincing response to the allegations on Friday afternoon.

    In yesterday's two-hour Radio Proto interview, Pourgourides, who is chairman of the House Watchdog Committee, called on Michaelides to resign, saying the minister's concerted effort to clear his name had only raised issues that further undermined his position.

    Referring to Michaelides' detailed response to the charges, Pourgourides said the minister had confessed to buying two luxury apartments at half price from developers J&amp;P and from the Zachariades group.

    "Purchasing the properties at half price indicates this person (Michaelides) obtained the flats for services given or for services that were expected from the minister by the businessmen," said Pourgourides.

    "This can only be viewed as a classic case of bribery or unlawful enrichment."

    Pourgourides questioned whether it made good business sense for a company as successful as J&amp;P to sell property at a loss if it did not expect anything in return.

    "Nobody today sells a flat for half its value without wanting anything in exchange.

    "If not, why don't they sell flats at half price to the rest of us?"

    Pourgourides has charged the minister with, among other things, accepting gifts of plush apartments in return for securing government tenders for contractors.

    During the press conference from his government office on Friday, Michaelides said he had bought a luxury apartment in Limassol's exclusive Gulf Palace complex from J&amp;P for £50,000 - £20,000 in cash and £30,000 financed by loan.

    The minister said he had paid off the loan from money received in renting the flat, but this explanation did not impress the deputy, who is also a practising lawyer.

    Pourgourides made some calculations of his own yesterday:

    "Let's say he paid off the £30,000 loan over four years; this would put the rent at around £1,000 a month.

    "For a flat to be rented for £1,000 a month, the value of the property must be £300,000 minimum."

    Another claim that he had received a Limassol flat on the cheap from the Zachariades group was dismissed by the minister, when he said on Friday he had bought it from a foreigner who wanted a quick sell because he was leaving the country.

    But Pourgourides responded in the radio interview by claiming no such declaration had been made to the Land Registry Office, which instead listed the flat as having been sold by a Zachariades group company.

    "He has practically confessed to kickbacks from J&amp;P and Zachariades," the deputy said.

    And the companies allegedly involved in such deals were also guilty of bribery, Pourgourides warned.

    "If a wealthy businessman offers a minister a flat for half its value that is also bribery."

    His attention later focused on the minister's statement concerning a £150, 000 Bank of Cyprus loan to buy shares in a high-profile company.

    "There was no mention of any mortgage; we would all like to secure bank loans on those terms," Pourgourides said.

    "Obtaining bank loans on personal terms not given to other citizens is a form of bribery. If it isn't, I don't know what is."

    Michaelides said on Friday his 20 per cent share in Gala Development Ltd had been financed by a loan from the Bank of Cyprus.

    "Any public figure may have a better chance of securing a bank loan than any other citizen, but this is not illegal," he insisted.

    Michaelides is also accused of having illegally obtained property worth millions abroad, allowing building relaxations for financial gain, issuing hundreds of residence visas for kickbacks and not declaring the true value of his property to avoid payment of duties and property transfer tax.

    Faced with 14 counts of corruption and unlawful enrichment, Michaelides has refused to tender his resignation.

    He has dismissed the allegations as lies and said they are motivated by Pourgourides' own personal and political interests.

    However, the House Watchdog Committee chairman believes that Michaelides has criminal charges to answer, and wants to see the Attorney-general Alecos Markides appoint an independent investigator.

    "In Europe and Canada, ministers have been sacked because they accepted a free airline ticket to go on holiday."

    Pourgourides has denied that his anti-corruption crusade is based on "personal and political criteria".

    The deputy claims he has received death threats over his revelations; he is understood to be receiving police protection and is reported to have been granted a permit to carry a gun for his own protection.

    Saturday, September 19, 1998

    [02] Optimistic growth prospects at threat from global crisis

    By Hamza Hendawi

    THE ECONOMY looks set to grow this year by as much as 4.7 per cent, 0.02 per cent more than official projections, but meeting the 1999 target of four per cent growth could be in serious jeopardy if the contagion in Asia, Russia and South America produces a global recession, bankers and economists said.

    Finance Minister Christodoulos Christodoulou himself sounded a cautious note last week in his 1999 budget announcement, saying that unexpected domestic or outside developments could interfere with what he called satisfactory rates of growth in 1998 and 1999.

    Beside the influence on the island's economy of a possible world recession, the economists and bankers also spoke of other lurking dangers, primarily the persistently low productivity plaguing several sectors and a drought that has been scorching Cyprus for three years.

    "A growth of four per cent in 1999 is certainly a feasible target," said a senior government economist, who did not wish to be named.

    "But the figure is shrouded in doubt because of the possible impact on the Cyprus economy from slower growth worldwide. After all, we do have a fairly open economy," the economist told the Cyprus Mail.

    The vulnerability of the island's economy to outside influences arises mainly from its vital and fast growing services sector, which, according to official figures, accounted for nearly 60 per cent of GDP last year.

    Prominent within the sector is tourism, which alone accounted for 20 per cent of GDP and $1.61 billion in foreign currency earnings last year, together with the offshore sector, which boasts some 34,000 companies registered on the island and earnings of nearly $350 million in 1997.

    Growth in tourism, the economists and bankers say, was heavily intertwined with the economies of the countries from which the tourists come.

    Britons, for example, account for more than a third of the two million plus tourists who come to the island every year.

    The appreciation of Sterling against the Cyprus pound in the past 18 months or so has helped boost the number of British tourists coming to the island.

    But growing signs that Britain is finally entering a recession period could pose danger to Cyprus tourism if Britons decide to stay home to save their money or take holidays at cheaper destinations.

    Britain's Labour government is also coming under increasing domestic pressure from industrialists to do something about the strength of Sterling, which has badly hit exports and negatively affected its own tourism industry.

    The economic turmoil in Russia and the woes of its rouble could also spell trouble for Cyprus tourism in 1999.

    Reports from Moscow suggest that a return to rigid foreign currency controls is likely in order to replenish foreign currency reserves and prop up the rouble. Under such a régime, only limited amounts of foreign currency would be legally available to Russians who wish to take a holiday abroad.

    A dramatic decline in the number of Russian tourists coming to the island would be particularly painful to the industry since they constituted one of the fastest growing markets.

    Russian tourists - some 200,000 were expected this year - have also established themselves on the island as among the biggest spenders together with Britons, at a time when spending by other tourists is on the decline.

    "If we cannot get growth in tourism, then I don't know where it will come from to sustain growth," said Yiannos Tirkides, the Cyprus Popular Bank's chief economist, alluding to the Russian crisis and Britain' slow skid into recession.

    Like in tourism, the potential danger of the contagion in Asia, Russia and South America engulfing the rest of the world could spell lean times for the lucrative offshore sector.

    Already the number of offshore companies maintaining a fully-fledged presence on the island has declined in 1997 for the second successive year to 1,049, and Tirkides said that figures showed that many of the latest arrivals were just brass-plate companies.

    Of the estimated 34,000 offshore companies registered on the island, approximately half of which are active, some 5,000 are Russian. These don't include companies that are here solely to do business with Russia and eastern Europe.

    These have reportedly seen their activity greatly diminished by the current uncertainty in Russia and the freeze on bank accounts enforced by the Moscow authorities soon after the crisis began five weeks ago.

    The senior government economist also predicted that Russia's new Prime Minister, Yevgeny Primakov, would be very reluctant to renew the Double Taxation Avoidance treaty with Cyprus in its present form. Instead, he said, he would press for additional sources of tax revenues.

    The treaty, one of about 30 that Cyprus has with foreign countries, is crucial to the profitability of Russian companies and others doing business with Russia from Cyprus.

    "Companies of good repute will cope with any changes if they are not too radical," the economist pedicled. A change in the treaty, he said, "might actually work in our favour and help us down the road to create an attractive and efficient business environment for companies which are not here just for the tax breaks."

    Saturday, September 19, 1998

    [03] Japanese second-hand cars flooding the market

    By Andrew Adamides

    A WHOPPING 77 per cent of all cars imported into Cyprus are second-hand, and the government is still considering slapping extra duty on the vehicles.

    Speaking after a meeting held last week with the car importers' association, Finance Minister Christodoulos Christodoulou said the problems caused by the glut of second hand cars was getting worse, with the amount of duty lost on the sale of new cars increasing as people switched to buying the cheaper, higher-specification Japanese imports instead.

    A tax package aimed at pushing down the sales of such vehicles was rejected in May. When the imports first started coming to Cyprus, they made up just 23 to 25 per cent of vehicle imported.

    There are also concerns that some of the cars do not meet European specifications, and about what might happen if Cyprus' bid for EU accession is successful.

    The vehicles, known in the UK as "grey" imports, are Japanese-market cars, both different versions of cars sold new locally and Japan-only models.

    Their sales in countries allowing their import have been slowly rising over the past few years, as customers are lured away from local-market cars by the imported vehicles' higher-specifications - most have air conditioning as standard - and lower prices.

    But they differ from European-spec vehicles in several ways. Fuel fillers, lights, speedometers, brakes and tyres are all areas which need work in order to bring them into line with European-market cars, although admittedly not all models may require all the alterations.

    Many of the imported Japanese vehicles sold in image-conscious Cyprus are four-wheel-drives and performance cars, although family saloons are also popular.

    Saturday, September 19, 1998

    [04] Weddings and telegrams

    By Andrew Adamides

    CYPRUS' quest to turn itself into a glowing replica of Beverly Hills is progressing well, if arrangements at the latest society wedding are anything to go by.

    Following the wedding of his son yesterday, Deputy Tassos Papadopoulos held a large and glittering party at his family home in Strakka (between Lakatamia and Deftera) last night.

    However, as the house is on a main road, police had warned there could be no parking at the roadside, so invitations were accompanied by a letter informing guests there would be special parking lots provided for those who weren't coming by taxi.

    The lots were marked out with neon signs, and Group Four security men were at hand to aid parking.

    But one major problem still remained: the daunting 500-metre stretch separating the car park from the ranch-style house. Would the guests have to set out on foot?

    But the hosts were undaunted, laying on a shuttlebus to ferry guests from their cars up to the house every five minutes.

    Beverly Hills, however, probably has a telegraph system that can cope with a glut of telegrams. It is thought the flood of telegrams on their way to the happy couple may have contributed to CyTA's shutdown of the service early yesterday.

    When a customer dialled 196, he got a recorded message reciting the opening times of the service - ironically confirming that it should have been available at the time of the call. On ringing 197, the fault report line, he was informed there were so many telegrams coming in that the single employee manning the phone had taken it off the hook at least an hour before the advertised closing time of the service (12.45pm on a Saturday), switching over to the tape so he could work in peace.

    And so the unfortunate caller, who had himself wanted to send a congratulatory telegram to the bride and groom, was let down by CyTA.

    A time for e-mail to replace the traditional wedding telegram, perhaps?

    Saturday, September 19, 1998

    [05] More icons stolen than originally thought

    POLICE yesterday revealed that a shocking 18 icons had in fact been stolen from the Church of the Apostle Barnabas and Saint Hilarion on Thursday night, and not eight or nine as was thought originally.

    The value of the icons is, police say, incalculable.

    Among the stolen artworks taken from the church in Peristerona are depictions of Saint Barnabas and Hilarion, dating from circa 1816, and portraits of Saint Nicholas, Saint Charalambos and the ascension of Christ, all of which date from 1849. The other pieces stolen also date from the 19th century, and all are considered priceless.

    The church's collection box was also broken into during the robbery, although it is not known how much money was taken.

    Nicosia CID is investigating.

    The thefts took place between 9.20pm on Thursday and 5.15am on Friday morning.

    Ports and airports have been alerted in order to prevent the works from being smuggled out of the country.

    Saturday, September 19, 1998

    [06] Man dies on plane

    A 73-YEAR-OLD Ayios Dhometios man returning to the island from Zimbabwe died yesterday morning as his flight was coming in to land.

    Nicolas Mathaiou was found dead in his seat by flight attendants as Air Zimbabwe flight AZW432 from Harare prepared to descend to Larnaca. The pilot radioed ahead to alert emergency services and Mathaiou was rushed to Larnaca General Hospital immediately on landing.

    He was pronounced dead at the hospital, and taken to Larnaca morgue for an autopsy to determine the exact cause of death.

    Larnaca CID has launched an investigation, but foul play is not suspected.

    © Copyright Cyprus Mail 1998

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