A QUESTION that many people have been asking over the past few weeks is how a man who once claimed to be “The richest man in Cyprus” could lure in seasoned city investors, bankrupt two airlines and a network of companies and “lose” £100 million sterling.
A number of former employees and business partners of Cypriot Elias Elia have come forward since the demise of his UK-based firm E-Clear, which they universally attribute to Elia’s mismanagement and malpractice – the story of a charismatic but ultimately incompetent businessman.
But as far back as February 2009 it appears Elia had made at least one enemy. The home of his parents in Nicosia was shot at six times, damaging their porch but without injuries. The crime remains unsolved.
Born and raised in Nicosia to Maronite parents, Elia was an industrious teenager who worked various summer jobs. He arrived penniless in London in the late 1990s. In 2001, saying he was a Chartered Accountant, he was introduced to a Cypriot investor, George Palaondas by the founder of E-clear, Nigel Evans.
Palaondas was looking for a new investment and so he bought the company from Evans, appointing Elia as CEO and issuing him 30 per cent of the shares. From this point on however, the sums of money at his disposal were to spiral beyond his control. According to one former associate: “The money went to his head and he thought he could do anything. He did not listen to any of his management team.”
From the outset there were problems with E-clear, however.
A former employee at the time says JCC systems rejected the company due to their inadequate software. Elia, however, would not upgrade.
Next Alpha Bank would not give Palaondas an account because of his previous business’ performance. To solve this, Palaondas temporarily signed over his 60 per cent stake to Elia. Together they signed an agreement that Elia would return the shares when Palaondas requested them.
“It was difficult to control Elias from Cyprus. For example I found no trace of his chartered accountant qualification, and I found out he rented or bought an apartment in Mayfair while he was pretending to commute to north London every day. I had fly from Cyprus every week.” Palaondas said.
When technical problems led to late payments, two US clients threatened legal action, and Palaondas tried to get out. “I froze the company accounts and retrieved my 60 per cent shares (as previously agreed).” Palaondas said but by then he had lost close to £1 million.
As the list of clients increased in the next few years, so did the sums of money passing through E-Clear’s books. From February 2007 to February 2008, E-Clear processed £779 million in credit card payments and made a profit of £5.4 million. Keen to keep up the appearance of wealth, Elia commuted from his Knightsbridge flat to his Berkeley square offices in a Rolls Royce, and he reportedly owned a Ferrari, a Range Rover and a Mercedes.
During this period, Elia embarked on various multi-million pound projects, including the purchase of a bank for £15 million, a Cypriot property firm (his former business partner declined to comment, as they have been in court for the past two years) and an attempt to buy an airline. The German Financial Regulator would later declare “that Elia was not trustworthy enough to run a bank”.
One such project included the sponsorship of Paralimni football club (ahead of an alleged plan to buy AEK Athens). A source close to Elia told the Cyprus Mail that in early 2009, when Elia failed to produce €320,000 in cash for the club, a “notification” was sent and the cash was paid the next day. The source did not elaborate further on the nature of the notification.
As for the £100 million most former employees believe that it will never be retrieved, and that Elia, may return to Cyprus as penniless as when he left.
