By Hamza Hendawi
IN WHAT appeared to be a slight but significant hardening of his stand, Attorney-general Alecos Markides yesterday said that public confidence in the government had been undermined over revelations that politicians and civil service stalwarts had acquired shares in Louis Cruise Lines through private placement.
Although sticking to his argument that no law had been broken, Markides spoke for the first time yesterday of the “violation of principles.” In a letter to President Glafcos Clerides, he reiterated his call for certain laws to be changed to provide better provisions against corruption and the risk of public servants being biased while carrying out their duty.
Markides’ remarks appeared more forceful than his opening statement in a news conference held at his office on Monday afternoon, when he repeatedly stated that his job’s terms of reference did not permit him to rule on political and social ethics.
“It is clear that the public’s trust in the government has been shaken (by the Louis affair). This is important and it is based on this that I said what I said,” said Markides, who plans a probe into whether public figures acted inappropriately in handling matters related to companies in which they own shares.
“No illegal action was detected, but principles had been violated,” he said. “There is a network of rules that are not part of the law. Not every part of a government is run by laws, but there are ethics, political and social. All this depends on what public opinion finds acceptable or unacceptable…”
President Clerides asked Markides last week to determine whether a ban on Cabinet ministers acquiring shares in public companies through private placements could be extended to civil servants.
His request followed revelations that former Communication Minister Lentios Ierodiaconou and the ministry’s permanent secretary, Vassos Pyrgos, obtained shares in Louis Cruise Lines through its private placement. Both men have vehemently denied any wrongdoing.
The Ministry of Communication earlier this year granted Louis Tours a licence to operate a charter airline. Pyrgos heads the ministry’s air transport committee, which granted the permit. Another top civil servant whose name appears on the list of the private placement beneficiaries, director of the Finance Ministry’s Planning Bureau Panicos Pouros, also sits on the committee.
Later revelations showed that several top public figures, including Central Bank Governor Afxentis Afxentiou and Akel deputy Takis Hadjigeorgiou, were among those given shares by Louis Cruise Lines in the private placement. The revelations sparked an outcry in the media and mired the Louis name in a fresh round of corruption allegations.
Also on Louis’ private placement list are the ruling Disy party, the opposition Diko party of House Speaker Spyros Kyprianou, Chairman of the Cyprus Tourism Organisation Andreas Erotokritou, Dias media group, which publishes the daily Simerini, the English-language weekly newspaper Financial Mirror, Director of Customs Andis Tryphonides, Costakis Christophorou, director of the House of Representatives, Michael Erotokritos, director of the Ministry of Commerce and Industry, and Takis Kanaris, head of the research department at the Central Bank.
All those who chose to defend their names in public insisted that they had not broken any laws, while Louis stated that it did not expect any preferential treatment from those who benefited from its generosity.
But Akel spokesman Nicos Katsourides yesterday called on government servants found to have obtained Louis shares in the private placement to step down or give their profits away, a course of action already followed by Akel deputy Hadjigeorgiou.
Katsourides said Akel, the island’s largest opposition bloc, did not excuse Hadjigeorgiou for obtaining shares in the private placement, but added that the matter was more serious for those who occupied government positions.
Louis Cruise Lines’ eagerly-awaited debut on the Cyprus Stock Exchange was embroiled in controversy from day one. Two top executives of the company, including its managing-director, dumped tens of thousands of shares and warrants on the day of the titles’ debut. Their action angered many investors when the value of the share began to drop amid perceptions that their sale suggested little confidence in the company’s future. The share has since languished in below-expectations territory.
In a separate development, the House’s powerful Finance Committee met yesterday for nearly three hours to discuss ways of protecting small investors and to look at the future of the stock market, which reopens on Monday after a three-week break to allow brokerages to clear a backlog of administrative backroom work.
Representatives from the Cyprus Stock Exchange told the committee some brokerages would not have cleared their backlog of delayed transactions when the market reopened.
Akel deputy Kikis Kazamias suggested the taxation of capital gain, saying that petrol station owners and lottery collectors had amassed millions through trading in stocks while ordinary workers paid their tax before receiving their wages.
Diko’s Tassos Papadopoulos looked ahead to the imminent end of what he called the “brokers’ monopoly”, with their number set to rise dramatically after qualifying exams scheduled later this month.
He said he would present proposals for changes in the law governing the Stock Exchange during the House’s first plenum in order to eliminate problems afflicting the bourse. He did not elaborate.
HELLENIC Bank, the island’s third largest financial institution, yesterday announced an increase of 53.7 per cent in pre-tax profits for the first six months of the year.
It said profit in the January 1-June 30 period amounted to £8 million, compared to £5.2 million in the corresponding period of 1998.
