The attorney-general has censured the way the finance ministry was interpreting an agreement with betting giant Opap, which apparently cost the state up to €12m in lost revenues, MPs heard on Thursday.
The issue was raised by auditor-general Odysseas Michaelides who wrote to the president after his admonitions to the finance ministry had fallen on deaf ears.
In his letter, Michaelides said he was forced to contact the attorney-general after repeated suggestions to finance minister to seek legal advice as to the proper interpretation of the agreement in a bid to ensure the state’s interests.
“The minister not only did nothing, but on the contrary, in a January 18, 2017 letter, he was strongly against this effort, deciding there was no issue of wrong interpretation of the interstate agreement,” the auditor said.
Michaelides estimated that this led to loss of revenues worth €10m to €12m annually.
Asking for a legal opinion “was the least he could do” the auditor said of Finance Minister Harris Georgiades.
“This persistence that the agreement is correctly interpreted I don’t believe is consistent with securing public interests,” the auditor told the House watchdog committee.
The disagreement lies with how the state’s share is calculated.
Before paying the state, Opap subtracts commission to its agents, prize money, and other projected expenses set as a percentage of turnover.
The auditor argues that the difference between projected and real expenses is pocketed by Opap and not the state.
In his letter to the president, Michaelides said the attorney-general had opined that any interpretation of “the provision in question, which takes into account the so-called notional expense and not the real one that is paid, is unacceptable and unjustified based on the wording of the condition and the correct way of interpreting it.”
He added that the interpretation adopted by Opap not only rendered the provisions lopsided but, also, such an interpretation is logically untenable.
Opap, once a state-run betting giant – founded in Greece in 1958 – turned into a joint stock company in 1999, and in 2013 the cash-strapped Greek state sold the majority of stocks to Emma Delta Hellenic Holding Limited, a Greek-Czech group.
Based on an interstate agreement entered into between Cyprus and Greece, Opap is the only company allowed to run lottery games on the island. The deal was signed when Opap belonged to the Greek state.
Critics argue that since the Greek state is no longer a shareholder, Opap’s special status should be abolished.
Earlier this year, Michaelides said Opap should be paying the state some €25m more than what it actually paid.
He said that up until 2013, the state’s revenues from Opap had averaged some €10m a year. But during the same period Opap’s gross receipts shot up from under €50m to nearly €200m.
