By Hamza Hendawi Business Editor
A LIST of recipients of Louis Cruise Lines’ private placement shares shows Central Bank Governor Afxentis Afxentiou, Akel deputy Takis Hadjigeorgiou and several senior civil servants to have been on the receiving end of the company’s generosity.That someone like Afxentiou, who is the supreme guardian of the island’s economy and currency, and top civil servants in key posts are now known to have received shares in Louis’ private placement is likely to deepen the controversy surrounding the company since its eagerly-awaited debut on the Cyprus Stock Exchange early last month.Afxentiou, who is listed as having received £5,000 worth of shares in the private placement, declined to make any comment when reached by the Cyprus Mailyesterday afternoon. “I am not prepared to make any comment, at least for the time being,” he said.The inclusion of Hadjigeorgiou on the list obtained by the Mailis equally significant since opposition communist Akel, the second largest political party in Cyprus, has taken the moral high ground, reacting with considerable indignation to revelations last month that Disy and the opposition Diko party of House Speaker Spyros Kyprianou received hundreds of thousands of shares in the private placement.Hadjigeorgiou, who runs the party’s Astra radio, did not return calls by the Mailseeking his comment. According to the list, he received £10,000 worth of shares in Louis.Other names on the list obtained by the Cyprus Mailinclude Director of Customs Andis Tryphonides (£20,000), Panicos Pouros, director of the Finance Ministry’s Planning Bureau (£10,000), Costakis Christophorou, director of the House of Representatives (£10,000), Michael Erotokritos, director of the Ministry of Commerce and Industry (£10,000), and Takis Kanaris, head of the research department at the Central Bank (£12,000).The graft and sleaze allegations now swirling around Louis and segments of the island’s political and bureaucratic establishments have replaced the high expectations and confidence which greeted the Louis flotation, once touted as the most successful in the history of the Cyprus Stock Exchange.Peculiarly, everyone touched by the allegations, including Louis Cruise Lines, Disy leader Nicos Anastassiades and Kyprianou, appears hung on the misleading argument that they did not break any law in accepting thousands of shares at 40 cents apiece, which made gains of up to 700 per cent on the first day of trading.Questions of political ethics, moral integrity and the argument for the need to maintain a safe distance between big business and politicians have been left for newspaper columnists and commentators to dwell on.It was only this week that Clerides decreed it would be a sacking offence for any Cabinet minister to accept shares in public companies as part of a private placement. He is also seeking legal advice from the Attorney-general’s office on a similar ban covering government employees.The President acted following disclosures earlier this week that former Communications Minister Leontios Ierodiaconou had secured more than 50,000 shares in Louis as part of the private placement. The minister resigned from his post last month to take up an academic job, but denied that his acquisition of the shares was connected to the granting early this year of a licence to Louis to start a charter airline.However, Vassos Pyrgos, permanent under-secretary at the ministry, was found to have been among the fortunate ones with private placement shares worth £5,000. He too denied any wrongdoing. Pyrgos heads the ministry’s air transport committee, which granted the Louis licence.Louis Cruise Lines, one of the world’s largest cruise ship operators, has so far stuck to its line that it did not expect a return on its “gesture” towards politicians and civil servants. But it has never attempted in its statements or in remarks by top officials to answer the questions: Why did it choose to include politicians, major political parties and top civil servants in key positions in its private placement list? And why has it so far resisted pressure to make public the original private placement list?Defence Minister Socratis Hasikos, fending off accusations, yesterday demanded that the names of those who obtained shares as part of the private placement be published in full. He insists that his Louis shares were purchased in the Initial Public Offering.The Louis private placement was worth £8.95 million, while its Initial Public Offering amounted to £9.5 million. The IPO was oversubscribed 53 times, prompting the company to give out shares on a pro ratabasis, thus leaving small investors with about 1.7 per cent of what they bid for.The pro ratasystem also favoured those with financial muscle who were able to produce huge sums up front in order to secure a decent number of shares.Adding insult to the injury of small investors was the dumping by two top Louis executives of tens of thousands of shares on the first day of trading, an action that forced the price sharply down, and the revelations later about those who benefited from the private placement.The list obtained by the Cyprus Mailalso includes Harach Publications Ltd., which publishes the English-language weekly newspaper Financial Mirror (£20,000 worth of shares), and the Dias Group, publishers of the pro-Disy daily newspaper Simerini(£12,500 worth).The Mirrorran several articles extolling the virtues of Louis Cruise Lines before its titles made their market debut last month. The newspaper also came out strongly in defence of the company when the two executives sold shares and warrants on the first day of trading. Simerinihas also run a series of positive reports on Louis shares.
