Probe into ‘suspicious’ Turkish Cypriot land deal

George Psyllides
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6

THE cabinet decided yesterday to investigate the suspicious sale of Turkish Cypriot land under the previous administration’s watch, a case that has sparked a row with the opposition.

The land, in Dromolaxia, Larnaca, was sold to a Greek Cypriot, and after the coefficients were upgraded, it was sold to the telecommunications authority (CyTA) pension fund in 2011 for around €22 million.

Interior Minister Socratis Hasikos said the procedure was done at the “speed of light,” suggesting that the whole process had been improper.

And CyTA chose the plot over an adjacent one that was cheaper – by around €4.0 million – bigger, with all the necessary permits and building coefficients.

“All these will be the object of the investigating committee,” Hasikos said after the cabinet meeting yesterday.

Former interior minister Neoklis Sylikiotis accused Hasikos of lying and warned that he could file a lawsuit against him.

Sylikotis said the case had been examined by the House Watchdog Committee, which found nothing wrong, challenging Hasikos to make the file public.

“The case was closed by the Watchdog Committee,” Sylikotis said. “We are talking about libel and slander and I am already looking into the matter with my legal adviser.”

Hasikos said he had nothing personal with Sylikotis and “it is Mr. Sylikiotis’ right” to start legal procedures if he thought he had been slandered.

“It is the previous administration that is under scrutiny. Mr Sylikiotis was a member of the cabinet and the cabinet makes decisions based on the information submitted by the minister in charge,” Hasikos said.

CyTA chairman Stathis Kittis also denied any wrongdoing. He too claimed that parliament had finished examining the case.

“We have no problem and we do not feel fear or guilt. It was an investment like all others.” Kittis said. “The price was very good under the circumstances.”

However, ruling DISY MP Giorgos Georgiou, chairman of the committee, said the investigation was far from over. He also charged that CyTA has so far failed to respond to at least three letters seeking information since last June.

“To date, we have not received any response,” he said. “This issue will be tabled before the Watchdog Committee.”

Probe into Turkish Cypriot land deal

Limitation time bomb six month fuse delay

Nigel Howarth
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1

IN MARCH this year we published an article ‘Limitation time bomb awaits British home buyers‘ concerning a new limitation law “The Limitations Law (66(1) 2012)” that came into force in the Republic of Cyprus on 1st July 2012.

Limitation periods impose time limits on which a party must bring a claim or give notice of a claim to the other party. Once the limitation period has expired, a party is prohibited from starting a claim against another party.

The ‘new’ law provides for different limitation periods depending of the nature of the actionable right. It provides for a general limitation period of ten years and introduces various limitation periods for specific actionable rights. For example:

Actionable Right
Limitation Period
Breach of contract Six years
Damages for nuisance, negligence or breach of Statutory Duties Six years
Defamation or malicious falsehood One year
Tort Actions Three years
Action for remuneration of self-employed persons (e.g. lawyers, doctors, architects, etc.) Three years
Bills of exchange, Bonds in customary forms, cheques, promissory notes Six years

One of the provisions of the new law was a one year transition period from the date of its adoption to allow those who were approaching limitation to issue proceedings.

As many foreign currency loans were entered into from 2006, those who had not tackled their predicament by issuing proceedings could find that their opportunity had been lost when the transition period expired on 1st July 2013 – and this put pressure on them and their lawyers to act quickly.

Earlier this week parliament voted to extend the transition period for six months and it will now expire on 31st December 2013, giving more time for those wishing to issue proceedings to do so before the transition period expires.

(A one-year extension had been proposed by the General Attorney and the Minister of Justice and Public Order and subsequently approved by Council of Ministers on 23rd January this year.

However, when MPs debated the extension they were unwilling to extend it beyond December 2013. Previous limitation laws had been continually extended and postponed by a succession of laws since the 1974 invasion and MPs considered that a further extension beyond the end of this year would make the new law pointless).

Race to revalue half a million properties

George Psyllides
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13

EMPLOYEES at the land registry are putting in extra hours without pay to reassess property values as part of the island bailout deal.

Cyprus has until now taxed properties according to their 1980s values and many properties have not even been registered, making it difficult for authorities to come up with a fair Immovable Property Tax.

Deputy land registry director Kleanthis Kleanthous said civil servants were busy pulling 12-hour shifts – with no overtime – to revalue some 500,000 properties island-wide.

The reassessment must be completed by June 2014.

International lenders have also demanded that in the next 20 months the department must issue overdue titles for 60,000 units.

Until now, the department issued 1,000 title deeds per month – it would have to increase its performance to 3,000 to complete the task.

“Civil servants are conscious of the problems and do whatever they can to help,” Kleanthous said.

He added that a number of his colleagues had voiced their readiness to work without overtime pay, even on Saturdays, to help get the job done in time.

“Seeing the huge need, a lot of colleagues from all districts, have volunteered to work for at least one Saturday,” Kleanthous said.

The department must also evaluate all state property, including that belonging to semi-state organisations and municipalities.

“We will all take to the streets or work in the office, to give the message that we know what is going on and we do not want additional taxes on Cypriot society,” Kleanthous said.

Kleanthous urged the public to show understanding since the department’s other duties will inevitably be carried out at a slower pace.

In April, the government was forced to submit provisional Immovable Property Tax legislation (IPT) in a bid to meet immediate bailout conditions, but pledged to have it amended by the end of June to make it fairer.

Authorities lacked sufficient data to prepare a comprehensive proposal but at the same time the bill had to be approved for Cyprus to be eligible for the much-needed first tranche of a €10 billion bailout it received this month.

“There are whole areas in Limassol, Nicosia, and Larnaca, where houses worth millions of euros are built, which do not have a building permit at the moment and are considered plots and fields,” government spokesman Christos Stylianides said at the time.

Race to revalue half a million properties

Church unveils large-scale construction projects

Editorial
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1

THE Church of Cyprus has begun the process of implementing large-scale works aimed at bringing investors and thousands of jobs to the island.

Archbishop Chrysostomos II, said that the goal is to find work for as many unemployed Cypriots as possible.

He announced that an agreement had been reached with Russian investors to build a major hotel at a Paphos coastal area expected to cost €70 million. The Church will provide the land for the hotel and receive a rent of €1.5 million a year.

The Church will also provide land for the building of a private English-speaking school in Nicosia and a geothermal park and in addition it will take out a loan for the restoration of historical buildings in the walled city of Nicosia.

Chinese investors aim to pour 1.5 billion into Cyprus

Editorial
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3

CHINESE investors aim to pour one-and-a-half billion euros into Cyprus, the President was told yesterday.

President Nicos Anastasiades received a delegation of the Hong Kong-based company ‘China Glory National Investment’ which is investing in the Venus Rock Golf Resort project in Ha Potami, in the district of Paphos.

The delegation was headed by Chinese investor Charles Zhang and businessman Theodoros Aristodemou of Aristo Developers Ltd, one of the largest developers in Cyprus.

Earlier this month Aristo Developers and Venus Rock Estates Ltd, subsidiaries of real estate investment firm Dolphin Capital Investors, sold their interest in the golf resort to the Hong Kong investors for €290 million.

Speaking to reporters after the meeting, Aristodemou said the Chinese investors have confidence in Cyprus and want to invest in other projects as well, though he declined to give further details.

“The whole investment will reach about one-and-a-half billion euros and instantly have multiple benefits, both with regard to employment on completion of the project and in direct revenue in terms of taxes, direct and indirect,” he said.

“At this stage it may be around €40 million but by project completion it may reach €400 million.”

Aristodemou said the investment is extremely important to Cyprus because it sends a message abroad that the country can still attract foreign investments despite the financial crisis.

For his part, Charles Zhang said the company sees great potential in Cyprus:

“After we studied Cyprus, we realised that there are very good prospects for investment.”

He added that the President gave his full support to the investment, noting that “for the project in which we are investing we are using a local workforce as much as we can.”

The project will include two golf courses, a five-star hotel, two community sports centres, a commercial and leisure component – as well as luxury private homes.

The sale to the Hong Kong investors comprises all the plots and land, all permits and licenses granted, all related machinery and stock, and all the contracts and other agreements relating to the project’s development.

The agreed purchase price for the sale of the sellers’ interest in Venus Rock amounts in aggregate to €290 million and comprises a fixed consideration of €241.5 million and a conditional deferred consideration of €48.5 million.

The €290 million price tag represents around 22 per cent discount to its latest valuation of €370 million as at December 31, 2012.

Chinese investors aim to pour 1.5 billion into Cyprus

Sale of Venus Rock Golf Resort

Nigel Howarth
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11

DOLPHIN Capital Investors Limited has announced the sale of the Venus Rock Golf Resort in Paphos to an investment group from Hong Kong in a deal signed on 17th May for €290 million.

Venus Rock is one of the largest beach front developments in Europe situated on 2,375 acres (961 hectares) of land with 850 metres of beach front.

Subject to planning permission, it will include the five star Nikki Beach Hotel and Beach Club, two 18 hole golf courses designed by Tony Jacklin, two community sports centres, up to 3,000 luxury private homes, commercial and leisure facilities convenience stores, shops, coffee shops, restaurants and cinemas.

In their press release Miltos Kambourides, Managing Partner of Dolphin Capital Partners Limited, commented:

“In line with our strategic objectives for 2013, we are pleased to execute this landmark transaction, which has enormous benefits not only for Dolphin but also for the Cypriot economy in general.

“In a period of very challenging market and operational conditions in Cyprus due to the current banking crisis, the sale of Venus Rock for a significant cash consideration, demonstrates the quality of Dolphin’s real estate portfolio and proves the resilience of the Cyprus property market.

“We look forward to establishing a strategic partnership with the Purchaser of the Venus Rock project and expanding the relationship to other Dolphin assets”.

Dolphin is a leading global investor in the residential resort sector in emerging markets and one of the largest real estate investment companies quoted on AIM in terms of net assets. Dolphin seeks to generate strong capital growth for its shareholders by acquiring large seafront sites of striking natural beauty in the eastern Mediterranean, Caribbean and Latin America and developing sophisticated leisure-integrated residential resorts.

Since its inception in 2005, Dolphin has raised €948 million of equity, has become one of the largest private seafront landowners in Greece and Cyprus and has partnered with some of the world’s most recognised architects, golf course designers and hotel operators.

Dolphin’s portfolio is currently spread over approximately 63 million m2 of prime coastal developable land and comprises 14 large-scale, leisure-integrated residential resorts under development in Greece, Cyprus, Croatia, Turkey, the Dominican Republic and Panama and a 49.8% strategic participation in Aristo Developers Ltd, which is one of the largest holiday home developers in south east Europe with more than 60 smaller holiday home projects in Cyprus.

Dolphin is managed by Dolphin Capital Partners, an independent real estate private equity firm.

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