By Angelos Anastasiou
SOME €850,000 in Cyprus Tourism Organisation (CTO) funds aimed at upgrading and developing the tourism sector, were wrongfully channelled to a hotel that was later found not to have met the minimum requirements, until European monitors removed it from the list of eligible recipients, daily Politis reported on Thursday.
According to the paper, an internal probe found that the three-member review committee, which received and graded applicants for funding, approved Ayia Napa-based Limanaki Hotel for funding to improve the hotel in 2010, even though it scored lower than the minimum requirements.
Last week, the CTO board discussed the probe’s findings before forwarding the file to the Tourism ministry’s permanent undersecretary, but acting Director Annita Demetriadou – who had been on the approving panel, along with Yiorgos Pericleous and Loukia Antoniadou – sent it back to the CTO’s internal audit department so that the indicted parties’ side of the story could be recorded and included.
This was not necessary, Politis claimed, as the investigation was not a disciplinary probe, but the required statements were attached to the report and forwarded to the Tourism ministry on September 12.
According to its findings, the three CTO officials accepted unaudited financials by the hotel in determining the investor’s ability to see the investment through, which still weren’t enough for Limanaki to meet the required standards.
And yet, the application was approved, with the three members citing the hotel’s rating as being very close to the minimum required grades, the financial crisis, and the area of the investment – Ayia Napa.
But the EU intervened in 2015 and removed Limanaki from the funding project, but placed the blame for the error squarely on the CTO – as there was no implication that Limanaki Hotel had somehow influenced the panel’s decision-making.
And because the CTO was solely found responsible, it could face budget deductions equal to the amount of the subsidy granted.
Meanwhile, one of the committee’s members – Pericleous – has also been found by the internal auditors to have bent the rules in another case.
According to the audit report, he was authorised to seek the opinion of a financial advisor on the application of a separate company – Yianna Marie Hotels Ltd.
At last week’s board meeting, Pericleous asked to recuse himself from the review of Yianna Marie’s application, disclosing close personal ties with the company’s owners.
But, the audit report said, Pericleous ought to have disclosed the relationship at the start of the review process, instead of the final stages.
