Banker quits citing ‘serious health reasons’

Nigel Howarth
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17

Bank of Cyprus
THEODOROS Aristodemou, the chairman of the Bank of Cyprus has resigned for health reasons and has been replaced by the bank’s vice chairman Andreas Artemis; Evdokimos Xenophontos has been appointed as the bank’s new vice-chairman.

Aristodemou, the founder and MD of Aristo Developers Limited, said in a letter to the board that “serious health issues” had forced a two-month absence abroad, and it was unclear when he could fully resume his duties.

“I judge that continuing to hold the position of president does not facilitate the smooth and unhindered operation of the group at an especially difficult time,” Aristodemou said.

“As Chairman, I sought honesty, transparency and collegiality in actions and decisions”.

“As the largest private Cypriot shareholder I participated in all efforts to strengthen the capital structure of the bank with very significant economic personal cost”, he added.

“The problems from the global economic and financial crisis are many and various. Especially the problems of Greece added to our weaknesses affected negatively our economy and financial system”.

“I’m really sorry that Cyprus failed to avoid it”, he stressed.

“Many placements, discussions and debates have been made on the causes and responsibilities of the problems of the economy and the banks. I had and still have my views on the reported problems. But I believe that it will contribute positively if from my post I will go in the midst of debates leading to disputes, at a time when understanding and collective decisions and actions are in my opinion very important and necessary”.

“The country needs a strong economy, strong and healthy banking system. I hope Bank of Cyprus to continue to be the mainstay of the economy”, he concluded, expressing his optimistic that this can be achieved despite the difficulties.

Commenting on his sudden resignation, a board member of the bank said “Mr Aristodemou feels he can’t continue in the job after undergoing a serious operation in the US given the present difficult circumstances”.

Aristodemou, the bank’s largest private shareholder, assumed the chairmanship in May 2008 and had been a member of the board since 1991.

His resignation comes only weeks after the departure of the bank’s chief executive, Andreas Eliades, who was forced to stand down after revealing an unexpected €500m capital shortfall according to a report in the Financial Times.

The Board of Directors has also accepted the resignation of Mr Manthos Mavrommatis who was appointed seven years ago.

There have been numerous negative reports in the media in recent times regarding the dubious practices that got the banks in hot water including their ‘unique’ methodology for determining nonperforming loans.

During the past week, the Cypriot media continued to report on problems within the Bank of Cyprus whose executives have responded by refusing to talk to the press.

“The bank’s new administration has assumed a difficult task and it is very unproductive to deal with announcements and commenting on such reports on a daily basis,” it said in a written statement.

A number of the reports are based on leaked documents, a matter currently under investigation by the bank.

Meanwhile Alvarez & Marsal, the independent firm appointed by the island’s Central Bank to investigate why the Bank of Cyprus and the Popular Bank had to seek government support, will also be seeking evidence of possible criminal offences.

Investigators to report criminal liability

Editorial
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5

A PROFESSIONAL services firm hired to investigate why the country’s two largest banks had to seek state support will also seek evidence of potential criminal offences, the Cyprus News Agency reported yesterday, citing Central Bank sources.

“If the firm, before it issues the final report, comes across some evidence, which signals civil or criminal liability” it will inform the Central Bank and give the information to the Attorney-general to examine the matter, CNA said, citing un-named sources inside the Central Bank.

The Central Bank said last week it had appointed Alvarez & Marsal to investigate what led the country’s two largest banks, Bank of Cyprus and Popular, to seek state support.

The probe was expected to “provide clarity and comprehension regarding the current financial stress” and guide remediation to strengthen the stability of the banking sector, the Central Bank said in a news release last Friday. Cypriot bank capital shortfalls from over exposure to Greek debt and then reliance on the government for aid forced Cyprus into seeking a financial bailout from its EU partners in June. A&M will investigate the conditions under which the bonds were acquired, the banks’ expansion abroad and the responsibility of the regulator.

The result of the investigation will help the Central Bank Governor make the necessary changes if it transpired that certain things must be put on a better basis, the source said.

Popular required state aid to fill a €1.8 billion shortfall in regulatory capital, and the Bank of Cyprus sought €500 million i.e. support when its own recapitalisation efforts fell through.

Both banks posted considerable losses on Greece’s debt restructure earlier this year, agreed by European Union leaders to make that country’s debt more sustainable.

Cyprus ranked in top 10 countries

Alan Lawton
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9

CYPRUS has moved up into the number nine position in the July issue of the ‘Top of the Props’ chart published by the TheMoveChannel.com earlier this month.

Spain retained its number one spot accounting for nearly one-fifth of buyer enquiries, while the USA remained strong in second place. France and Portugal came in third and fourth, followed by Italy, Turkey, Brazil and Bulgaria, with Cyprus and Croatia at numbers nine and ten respectively.

The full breakdown of the July 2012 Top of the Props chart is as follows:

RankCountryShareChange
1Spain19.39Non-mover
2USA14.66Non-mover
3France9.39Non-mover
4Portugal8.41Non-mover
5Italy5.59Non-mover
6Turkey3.28Non-mover
7Brazil2.99Non-mover
8Bulgaria2.57Up 10
9Cyprus2.44Up 2
10Croatia2.18Up 4
11Greece2.14Down 3
12Malta1.97Down 2
13Thailand1.53Up 6
14Cape Verde1.38Down 1
15Germany1.31Down 6
16Canada1.23Down 1
17Barbados1.23Non-mover
18St Lucia0.95Down 6
19Hungary0.92Up 2
20Cayman Islands0.71Down 4
21India0.67Up 3
22Poland0.54Up 5
23Egypt0.48Down 3
24UAE0.46Down 1
25Switzerland0.45Up 1
26Montenegro0.45Down 4
27St Kitts and Nevis0.42Up 5
28Morocco0.39Down 3
29Mexico0.28Down 1
30Belize0.21
31Grenada0.21Up 14
32St Vincent and Grenadines0.19Down 2
33New Zealand0.16Up 5
34Jamaica0.13Down 1
35Philippines0.12Up 1
36Indonesia0.12Down 7
37Slovakia0.11
38Romania0.11Down 1
39Austria0.09
40Slovenia0.09Down 9

TheMoveChannel.com is an overseas property search portal and its ‘Top of the Props’ chart is based on the number of on-line enquiries for property in more than 100 countries around the world.

Russian overseas property buyers

Nigel Howarth
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5

CYPRUS has been gaining in popularity amongst Russian overseas buyers for quite some time along with other Mediterranean and European countries.

In March this year the Tranio.Ru Internet Centre of Overseas Property portal carried out an online survey which included 202 respondents; representatives of foreign property agencies and private realtors.

Some of the key findings of the survey are outlined below:

  • The most typical buyer of overseas property is an entrepreneur or a business owner – a man older than 30 (and usually younger than 45), who is married with children.
  • Russian-speaking buyers are more interested in holiday accommodation and, to a lesser extent, in buying property in large cities. They are more likely to buy apartments in complexes rather than villas and other single-family residences. The most popular price category is up to US $150,000 (€120,000).
  • Other popular reasons for buying property overseas are linked to business, education, and medical treatment. A notable number of buyers plan to move abroad for permanent residence. Many buy property to settle their children or parents abroad.
  • In general, Russian buyers do not speak foreign languages although the majority of those who do speak English.
  • The most common reason for buying overseas property is the impression received during a holiday in the country concerned. To a large extent buyers are guided by advice from relatives and friends.
  • The main things that attract Russians in the countries where they buy property are favourable climate and weather conditions. A positive attitude of local residents towards Russians is also appreciated. Political and social factors, personal safety, low crime rates, and the opportunity to live in a peaceful and quiet place are of great importance.
  • Shopping facilities and delivery services lead among features of residential and social infrastructure. In addition, many buyers appreciate a high quality of medical care.

Full details of the Tranio.Ru survey and analysis may be found at Russian Buyers of Overseas Property – Who Are They?

Corruption investigation delays Chinese deal

Nigel Howarth
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8

THE GOVERNMENT has launched a final effort to save the deal on a multi-million Euro Chinese investment at the old Larnaca airport.

According to a report by state broadcaster CyBC, Cyprus Minister of Communications and Works Efthimios Flourentzou held talks this afternoon with Chinese investor Yang Ki. Last week, the Chinese magnate sent a letter to the government informing them of his intention to withdraw his interest due to time-consuming state bureaucratic processes.

However, it was disclosed that the Chinese company intending to invest at the old airport had been added to the corruption watch list by the Chinese authorities following press revelations concerning Marios Ieronymides. Yang Ki said this was why he was withdrawing interest for the time being – and will make a comeback when the matter has been resolved.

Meanwhile Mr Flourentzou assured that an investigation will be launched as soon as possible into the case of Marios Ieronymides, an associate of Yang Ki, who has been accused of conflicts of interests.

Marios Ieronymides, a top diplomat at the Presidential Palace, resigned following allegations that he benefitted personally from his ‘friendship’ with Yang Ki, sole shareholder of Far Eastern Phoenix, the company that signed a deal with Hermes Airports for a 19 year lease on the old airport.

Worries over new concrete buildings safety

Editorial
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12

Cyprus concrete building safety worries
IT SEEMS there is no end to the stupidity and duplicity that goes on when it comes to ripping off the public – in this case home buyers.

A year after the government allowed concrete manufacturers to alter the standards of their product, the technical chamber ETEK said on Monday the result has been to lower the quality and durability of today’s buildings.

According to ETEK, under the previous standard it would take 30 to 40 years for a building to need repairs, whereas with the new one, repairs should be expected a lot sooner. The chamber called last year’s decision ‘a step backwards’.

Not only was it ‘blatantly outside scientific frameworks’ but it was ‘dangerous’. ETEK says it knows no other country with a hot climate that allows production to the standard in question – all in the name of avoiding extra costs.

If it is really true what ETEK is saying, these statements should set off alarm bells. Not only will people need to pump more money into their homes a lot sooner, but last time we looked, we still lived in an earthquake-prone region.

Commerce Minister Neoclis Sylikiotis, who was meeting ETEK on Monday, said afterwards the government would re-examine the alterations made to the concrete standard.

This will involve a study into the quality of concrete in Cyprus, and a second one into international scientific research on concrete standards. This is the typical response of a government minister after the ship has sailed. After that no doubt there will be a committee appointed and discussions will open with the ‘interested parties’, and all the while the same substandard concrete – by ETEK’s reckoning – will continue to be used. Do we need an apartment block to fall, killing a dozen people for the seriousness of the implications to be realised?

How many buildings have been constructed using this unacceptable standard in the past year, and many more will be constructed before the year-long study is complete, and probably even more before the decision is reversed – if it’s reversed.

Why were the experts not consulted beforehand? It will cost more in time and money to examine and reverse a decision that didn’t have to be taken in the first place. In any case haven’t the experts (ETEK) just told the minister that the concrete being used is ‘dangerous’ and ‘blatantly outside of scientific frameworks’? That is their job after all.

The construction sector is in enough trouble between the recession and the title deeds issue. Well done to everyone involved for adding another nail to its coffin.

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