By Hamza Hendawi
HELLENIC Chemical Industries, a debt-ridden and insolvent company that refuses to die, today holds its first annual general meeting in three years.
The 5pm gathering at Nicosia’s Europa Hotel is not expected to settle any of the nagging questions that have surrounded the ill-starred company since shortly after its inception in 1977.
The government has a 27.5 per cent stake in Hellenic Industries and is believed to be owed at least £40 million by the company. The Hellenic Mining Corporation has another 30 per cent, the Co-Operative Movement 22 per cent and investors, mostly provident funds of public companies and semi- governmental organisations, 13 per cent. The Archbishopric has seven per cent.
Conceived during the later years of the late Archbishop Makarios’ rule, the company was set up to meet local demand for fertilizers and to produce chemicals.
But in the 22 years of its existence, it has produced fertilizers on-and- off for about three years in the 1980s. Its factory remains incomplete to the present day, standing on a desolate site in the Vassiliko Industrial area near Limassol. During the little time it was actually producing, the factory was running below capacity and with unusually low level of raw material retention.
The company went public in 1982, offering the general public three million shares at one pound apiece. The prospectus issued to the public, according to a high-powered committee set up by the Cabinet in 1984 to probe Hellenic Industries, included misleading or erroneous information.
The four-man committee issued a 270-page report in 1986, establishing that the “mistakes” contained in the prospectus were fraudulent and provided sufficient grounds for legal action against the company’s directors.
Those sitting on the committee were George Stavrinakis and Alecos Evangelou, who in later years became Cabinet ministers under President Glafcos Clerides, Michalakis Zambellas, the boss of chartered accountants PriceWaterHouseCoopers in Cyprus and Theophilos Theophilou, a senior civil servant who now heads the committee in charge of selecting civil service employees.
The committee’s findings were damning.
They concluded that some directors of the company did not tell the truth to House committees during several hearings – a criminal offence – and that they sought and secured loans despite their knowledge that the company was in no position to pay back.
Surprisingly, the committee’s findings failed to stir the government into taking any action against Hellenic Industries, whose board members at the time included relatives of powerful political figures and individuals, who remain in the public domain till the present day, occupying top jobs in the civil service. They also included captains of industry and prominent businessmen.
“Some of them are up at the Presidential Palace every day,” said Petros Yiassemides, a former marketing manager at Hellenic Industries and a shareholder who has for more than a decade campaigned virtually single- handedly to bring those responsible to justice.
He won a case against the company for unlawful dismissal, but his attempts to sue Hellenic Industries in a civil suit were blocked by the Attorney- general, invoking his right to stop legal proceedings in the name of public interest.
In April 1998, the Cabinet decided to liquidate the company, but nothing has been done so far to implement the decision.
If the company was to be liquidated, explained Yiassemides in an interview with the Cyprus Mail, the veil of limited liability would be lifted and its directors become personally responsible for the company’s actions.
