2012-10-23 13:22:44
Finance Minister Vassos Shiarly A DEBT of €6.5m owed by the AKEL-controlled Delta Trading company was written off by the Bank of Cyprus in 2006, bringing the total loans the party controlled firms have not had to repay the bank to €9.5 million.
The latest revelation follows an earlier one in August when Politis newspaper revealed that the Bank of Cyprus had written off a debt of nearly €3m owed by another AKEL-controlled company, Tamasos Enterprises Ltd.
Delta Trading company was set up in 1965
and was part of a network of AKEL-controlled companies that had business dealings with the former Soviet Union, which offered the party much needed financial assistance. Following the fall of the regimes in the Eastern Bloc, Delta, as well as most of the ‘party’ companies begun to accumulate big debts. Furthermore, they were owed some US$7m by the former Soviet Union from the export of products of which $5.2m were assigned to the government and the rest were receivables for the Bank of Cyprus. Delta found itself on the brink of bankruptcy.
On September 6, 2006, an agreement was made between then Bank of Cyprus manager (now finance minister) Vassos Shiarly, on behalf of the bank and Antonis Papanicolaou, director of Delta Trading Ltd, and AKEL secretariat member in charge of economic affairs, Venizelos Zanettou, whereby the assets of Delta Trading Ltd were transferred to Delta (Distributors) Ltd. It also provided for the forced sale of a plot of land (owned by Delta Trading) in Limassol, the writing off of €6.5m owed to the bank and the subsequent removal of all personal guarantors from the loan agreement.
More specifically, it was agreed that Delta Trading Ltd had reserves of CYP£90,000 and around £60,000 receivables. The bank and Delta appointed the director of Delta Trading as the liquidator with instructions to sell all stock/reserves and collect all money owed to the company. From the CYP£150,000, the bank would receive £124,000, £16,000 would go to the company to pay off other obligations (salaries, social insurance etc) and the remaining £10,000 would be the liquidator’s fee. The bank also agreed to grant Papanicolaou (the liquidator) an interest free loan of £124,000 so that he could pay off the bank immediately.
The stock was transferred to the new company Delta (Distributors) Ltd of which Papanicolaou was later the sole owner.
The plot of land, that was part of the agreement, was valued at £400,000 and it was agreed that from the sale, part would be used to pay the capital gains tax of this and other sales of land, and the rest would go against the debt of Delta Trading towards the Bank of Cyprus.
All this was the result of a decision taken by the board of directors of the Bank of Cyprus in May 2006 to find a ‘solution’ for the indebted company.
The way in which the Delta Trading Ltd. was stripped of its assets just prior to its official bankruptcy has angered other creditors. One has taken legal action and sent a letter to the Official Receiver disputing the amount of the reserves citing the 2005 audited accounts of the company that listed assets and receivables of much higher value. He also claimed that the company was the owner of collectable items such as coins, stamps and works of art that were not listed in the assets. According to the law, in case of liquidation all creditors should be treated equally, but this is for the courts to decide.
There is another issue though. The current finance minister, Shiarly, and AKEL’s Zanettou signed an agreement whereby the assets of Delta Trading Ltd were transferred just before its official liquidation to the new company Delta (Distributors) Ltd leaving the bank with a loss of €6.5m and other creditors with no chance of collecting any of the money owed to them. A second issue that arises is how Zanettou, negotiated, agreed and signed the deal with the Bank of Cyprus for the company’s bankruptcy since he had no legal connection to the company.
Could the answer be the fact that the real owner of the company was none other than AKEL? AKEL has never admitted that as a party it has any connection with companies and businesses in general. In fact in a recent interview in Politis, its General Secretary Andros Kyprianou said: “We own companies? If you mean that AKEL members are directors in companies, well, yes, but AKEL does not own any companies.”
In absolute ‘legal’ terms this may be correct. As several present and ex members of AKEL have said the party has a network of party businesses that on paper belong to AKEL members but the decisions and actions are controlled by the party.
Proof of this is an internal Bank of Cyprus memo, published on September 9 in Politis where it refers to the writing off of a €2.7m debt of another AKEL-controlled company, Tamasos Hotel Enterprises, and states that “The four guarantees/ors, according to them, were given following orders from their party AKEL, and it was a political decision since they are party officials.”
In the case of Delta Trading all owners are (or were) members of AKEL like ex Larnaca MP Doros Christodoulides, Vera Christodoulidou (sister of the MP), Doros Seraphim (ex-Omonia president and PRINTCO director), Skevi Koukouma, MP, and several other AKEL officials.
Even the plot of land that found its way into the assets of the company was part a donation made by the late Ezekias Papaioannou, a former AKEL general secretary. This plot belonged to his wife and his will gave it to Delta Trading Company.
Political parties are not legal entities and as such cannot be shareholders in companies. For AKEL it is not compatible with its ideology either. On the other hand the party is a huge organisation with paid personnel and other expenses and is in need of funds. Apart from fund raising events, donations from members and party supporters, a considerable percentage of its revenue came from businesses it owned. This was especially the case during the Cold War, when AKEL companies generated large amounts of money from privileged trade with the Soviet Union and other Eastern Bloc countries.
A network of companies were set up in the 1960s with the owners/shareholders being trusted party members. A senior party official disclosed that for safety reasons the individual shareholders would sign a share transfer document that was held by the party in case the party decided to change anything. When in 1989 a number of AKEL members defected, and held shares in AKEL-controlled companies, the ownership of these shares was never disputed by them.
Πηγή
InfoGnomon
The latest revelation follows an earlier one in August when Politis newspaper revealed that the Bank of Cyprus had written off a debt of nearly €3m owed by another AKEL-controlled company, Tamasos Enterprises Ltd.
Delta Trading company was set up in 1965
and was part of a network of AKEL-controlled companies that had business dealings with the former Soviet Union, which offered the party much needed financial assistance. Following the fall of the regimes in the Eastern Bloc, Delta, as well as most of the ‘party’ companies begun to accumulate big debts. Furthermore, they were owed some US$7m by the former Soviet Union from the export of products of which $5.2m were assigned to the government and the rest were receivables for the Bank of Cyprus. Delta found itself on the brink of bankruptcy.
On September 6, 2006, an agreement was made between then Bank of Cyprus manager (now finance minister) Vassos Shiarly, on behalf of the bank and Antonis Papanicolaou, director of Delta Trading Ltd, and AKEL secretariat member in charge of economic affairs, Venizelos Zanettou, whereby the assets of Delta Trading Ltd were transferred to Delta (Distributors) Ltd. It also provided for the forced sale of a plot of land (owned by Delta Trading) in Limassol, the writing off of €6.5m owed to the bank and the subsequent removal of all personal guarantors from the loan agreement.
More specifically, it was agreed that Delta Trading Ltd had reserves of CYP£90,000 and around £60,000 receivables. The bank and Delta appointed the director of Delta Trading as the liquidator with instructions to sell all stock/reserves and collect all money owed to the company. From the CYP£150,000, the bank would receive £124,000, £16,000 would go to the company to pay off other obligations (salaries, social insurance etc) and the remaining £10,000 would be the liquidator’s fee. The bank also agreed to grant Papanicolaou (the liquidator) an interest free loan of £124,000 so that he could pay off the bank immediately.
The stock was transferred to the new company Delta (Distributors) Ltd of which Papanicolaou was later the sole owner.
The plot of land, that was part of the agreement, was valued at £400,000 and it was agreed that from the sale, part would be used to pay the capital gains tax of this and other sales of land, and the rest would go against the debt of Delta Trading towards the Bank of Cyprus.
All this was the result of a decision taken by the board of directors of the Bank of Cyprus in May 2006 to find a ‘solution’ for the indebted company.
The way in which the Delta Trading Ltd. was stripped of its assets just prior to its official bankruptcy has angered other creditors. One has taken legal action and sent a letter to the Official Receiver disputing the amount of the reserves citing the 2005 audited accounts of the company that listed assets and receivables of much higher value. He also claimed that the company was the owner of collectable items such as coins, stamps and works of art that were not listed in the assets. According to the law, in case of liquidation all creditors should be treated equally, but this is for the courts to decide.
There is another issue though. The current finance minister, Shiarly, and AKEL’s Zanettou signed an agreement whereby the assets of Delta Trading Ltd were transferred just before its official liquidation to the new company Delta (Distributors) Ltd leaving the bank with a loss of €6.5m and other creditors with no chance of collecting any of the money owed to them. A second issue that arises is how Zanettou, negotiated, agreed and signed the deal with the Bank of Cyprus for the company’s bankruptcy since he had no legal connection to the company.
Could the answer be the fact that the real owner of the company was none other than AKEL? AKEL has never admitted that as a party it has any connection with companies and businesses in general. In fact in a recent interview in Politis, its General Secretary Andros Kyprianou said: “We own companies? If you mean that AKEL members are directors in companies, well, yes, but AKEL does not own any companies.”
In absolute ‘legal’ terms this may be correct. As several present and ex members of AKEL have said the party has a network of party businesses that on paper belong to AKEL members but the decisions and actions are controlled by the party.
Proof of this is an internal Bank of Cyprus memo, published on September 9 in Politis where it refers to the writing off of a €2.7m debt of another AKEL-controlled company, Tamasos Hotel Enterprises, and states that “The four guarantees/ors, according to them, were given following orders from their party AKEL, and it was a political decision since they are party officials.”
In the case of Delta Trading all owners are (or were) members of AKEL like ex Larnaca MP Doros Christodoulides, Vera Christodoulidou (sister of the MP), Doros Seraphim (ex-Omonia president and PRINTCO director), Skevi Koukouma, MP, and several other AKEL officials.
Even the plot of land that found its way into the assets of the company was part a donation made by the late Ezekias Papaioannou, a former AKEL general secretary. This plot belonged to his wife and his will gave it to Delta Trading Company.
Political parties are not legal entities and as such cannot be shareholders in companies. For AKEL it is not compatible with its ideology either. On the other hand the party is a huge organisation with paid personnel and other expenses and is in need of funds. Apart from fund raising events, donations from members and party supporters, a considerable percentage of its revenue came from businesses it owned. This was especially the case during the Cold War, when AKEL companies generated large amounts of money from privileged trade with the Soviet Union and other Eastern Bloc countries.
A network of companies were set up in the 1960s with the owners/shareholders being trusted party members. A senior party official disclosed that for safety reasons the individual shareholders would sign a share transfer document that was held by the party in case the party decided to change anything. When in 1989 a number of AKEL members defected, and held shares in AKEL-controlled companies, the ownership of these shares was never disputed by them.
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InfoGnomon
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