By Hamza Hendawi Business Editor
CENTRAL Bank Governor Afxentis Afxentiou and Akel deputy Takis Hadjigeorgiou yesterday owned up to their acquisition of shares in Louis Cruise Lines through private placement, but insisted they had done nothing wrong.Afxentiou maintained that he did not get the shares on account of his position and that the outcry over the Louis private placement would not have existed had the share’s value hovered around 60 or 70 cents.The Akel deputy, in a statement faxed to the Cyprus Mail, said he did not have the power or the political leverage to repay Louis for allotting him £10,000 worth of shares. Only the state machinery, he said, could affect the future of companies.”I would like to add that even when I decided to make the application (at the end of April), I had no knowledge of the stock market and neither do I today.”I conclude with the obvious that there has been a clear proof of the honourable way I acted in the fact that I registered the shares in my own name and not anyone else’s,” he wrote.Speaking to CyBC radio earlier yesterday, he said that Akel’s stance was for a ban on Cabinet ministers accepting shares in private placements. “There is nothing unethical or illegal about anyone else getting them,” said Hadjigeorgiou, who runs Akel’s Astra radio.Communist Akel, the island’s second largest political, responded with indignation to revelations last month that Disy and opposition Diko acquired hundreds of thousands of shares in Louis as part of the private placement.Harach Publications Ltd, which publishes the English-language weekly newspaper Financial Mirror, said yesterday that it had purchased shares in both initial public offerings and private placements as a “strategic investor” and “associate.”Beside Afxentiou, Hadjigeorgiou and the Financial Mirror, those known to have received shares as part of the private placement are the Dias media group, which publishes the daily Simerini, former Communications Minister Lentios Ierodiaconou, Vassos Pyrgos, the Communications Ministry’s permanent secretary, Director of Customs Andis Tryphonides, Panicos Pouros, director of the Finance Ministry’s Planning Bureau, Costakis Christophorou, director of the House of Representatives, Michael Erotokritos, director of the Ministry of Commerce and Industry, and Takis Kanaris, head of the research department at the Central Bank.Speaking on CyBC radio yesterday, Afxentiou, who has been at the helm of the Central Bank for more than a decade, pleaded for his rights as a citizen to be respected. He rejected the theory that civil servants were “second-class citizens” without the right to behave like their fellow Cypriots. And he accused his detractors of fabricating what he called “scandal scenarios” designed to defame both his own name and that of Louis.Rejecting the notion that he received £5,000 worth of shares on account of his position, Afxentiou said: “If the shares were valued today at 60 or 70 cents no one would have cared.”The Louis shares, sold at 40 cents apiece in both the private placement and the IPO, hit three pounds on their first day of trade at the Cyprus Stock Exchange in early August. The share was forecast at the time to hit £5 in a matter of weeks but the dumping of tens of thousands of shares and warrants by two of the company’s top executives pushed the price sharply down.Afxentiou said his own calculations predicted that the value of the Louis share would be between 60 and 70 cents, a surprisingly low forecast from the Central Bank Governor considering the hype and expectation which accompanied the share during the run-up to its market debut.Charges that Louis furnished those on the private placement list with preferential treatment, he said, were unfounded because this only became true when the share’s value went up “by coincidence”.Afxentiou said he had not contacted in person any Louis official to obtain his £5,000 worth of shares, but did not say whether he had formally applied for shares in the private placement.The name of Afxentiou’s son, auditor Costas Afxentiou, also appears on the list of those who obtained shares through the private placement. He received £20, 000 worth of shares.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” toward politicians, political parties and senior civil servants.
