A CONSULTANT who submitted false information on behalf of his clients to a non-profit company in an effort to win extra grant money for his clients is claiming that such fraud is commonly practiced and tolerated in the hope that he might escape being penalised, according to sources at the Cyprus Institute of Technology.
The Cyprus Institute of Technology is an independent non-profit company established in 1992 in a joint effort with the Trade Ministry, the Cyprus Chamber of Commerce and Industry and the Employers’ and Industrialists’ Federation. The company promotes competitiveness and technological upgrading of the Cyprus economy by managing European events and offering consultancy subsidies, among other things.
The Institute subsidises consultancy studies for manufacturing enterprises by 40 per cent, so that a consultancy study that would normally cost a manufacturing enterprise £10,000 would only cost them £6,000.
One of these consultants was recently investigated by authorities and found to have been reporting false information to pay less VAT. In self-defence, the consultant replied that all consultants did the same as him and that the Cyprus Institute of Technology not only knew about the fraud but tolerated it.
Politis yesterday published a letter reportedly from the President of the Cyprus Institute of Technology Costas Konis to the consultant. In the letter, Konis notes that authorities had notified him that the study had cost one quarter of the cost that the consultant had reported and so the consultant would have to return the money to the Cyprus Institute of Technology within 14 days or the Institute would take legal action against him.
Several sources at the Cyprus Institute of Technology confirmed that they were requesting that the man return the subsidies they had given him, adding that the consultant claimed that the Institute knew the consultants were overcharging in hopes that the financial penalties he faced would be dropped.
“The VAT inspectors discovered that one of our consultants was misreporting figures and asked him to pay more than £100,000,” one of the sources said. “He would take a £10,000 job from us and tell them that the study cost £4,000 so he could pay less VAT.
“So when they caught him, he visited MP friends and Politis newspaper to say this is a bad institute, trying to destroy everything to show that if the system is bad then why should he be the only one to blame for a bad system. So he started blaming others.”
The source said that the Institute has served 15,000 businesses in Cyprus since its inception, winning accolade from the European Union and the World Bank for its work and added that the auditor has been inspecting the company for the last 12 years and has not found any instances of fraud as the consultant claims.
“It [fraudulent reporting by consultants] is not at all a common practice. The consultant chooses to claim that this was a common practice and that allegedly the Cyprus Institute of Technology knew about it so that he would be left alone. He further claims that the Institute wants to destroy him. We don’t even know him personally. We have nothing against the man.”
The sources also spoke critically of Politis coverage of the issue in recent months, complaining that it was exclusively focusing on the consultant without getting their perspective on the issue.
“Now the paper decided that it has to attack the institute. It makes us very sad. Maybe it is because the president of the Board is the Trade Minister, Lillikas. They are looking for scandals and if they don’t find one, they make one up.
“We are a small organisation with a big project. We have helped an important section of the manufacturing industry. We are well known and we have heard only the best things about us. Unfortunately in the coverage of this issue there are other interests being served.
“I want to know what is behind all these attacks on the Institute.”
