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Cyprus
May 20, 2019
Cyprus Mail
CM Regular Columnist Opinion

The Don Quixote world of CyTA and EAC chairmen

By Loucas Charalambous

ON APRIL 19, a widely publicised meeting of the chairmen of CyTA, EAC, Ports Authority, State Fairs Authority, CyBC and Cyprus Sports Federation (KOA) took place.

After the meeting, CyTA chairman Stathis Kittis spoke to the press, launching a scathing attack against the troika. The meeting, he said, studied a proposal which would “close for good, as well as the unacceptable designs that the troika had on the assets of semi-governmental organisation, the issue of their privatisation in the form of a fire-sale, which appears to be the aim of many, both inside and outside Cyprus.”

Appearing like a self-satisfied victor, he revealed that loans would be sought, “primarily from Chinese banks, but also HSBC, BOA/Merrill Lynch and others that had shown great interest in lending to financially reliable and creditworthy organisations.” He added that the funding could be secured through the issue of bonds on the international market, underwritten by Goldman Sachs.

Another Don Quixote, EAC chairman Charalambos Tsouris, also boasted about the imminent victory over the troika, stressing that “in the event the troika does not accept the proposal which would raise the €1.4 billion, it was asking for, without the semi-governmental organisations being sold, its motives are dubious.”

More than three months have passed and we have still to hear what has happened to this ingenious plan. Kittis has not taken the trouble to inform us whether HSBC, Merrill Lynch or Goldman Sachs agreed to lend the €1.4bn and whether the troika accepted the proposal. Instead of these happy tidings, we are hearing about Kittis’ achievements in relation to the land of Moustafa in Dromolaxia.

We also heard from the auditor-general that the auditors of EAC had this year refused to sign the accounts of the organisation because “it cannot be considered a going business concern”. For readers unfamiliar with accounting lingo, this is another way of saying that the EAC was insolvent and, logically, should close down.

But most impressive of all, during the days the auditor-general’s report was released, was Tsouris’ reaction. I saw him on television talking about the EAC as a “profit-making organisation”. It was truly surreal. The chairman of an organisation, which the auditors considered insolvent, was publicly stating that it was a profitable business. God have mercy on us.

I advise Tsouris to ask for a loan from HSBC, not for €1.4bn but for 10 euros. When the bank sees the audited accounts of EAC, which it would ask for, it would not even lend him one euro. But if Petris the goat-herd who has 250 goats asked for a loan he would get it. This is because Petris’ herd is a solvent business.

I would hope that the troika, which has been in Cyprus for the last couple of weeks, has read the auditor-general’s report. If its members leave this time without insisting on the immediate privatisation of CyTA, EAC and the Ports Authority I would be obliged to agree with Tsouris’ claim that the troika’s “motives are dubious”.

As for Kittis, once he emerges from the Dromolaxia mire, he should inform us if he has received a response from HSBC, with regard to his loan request. Interestingly HSBC was the main shareholder of Laiki until 2006, but sold its share and moved out after the scandal of the Milosevic millions, which the bank had been laundering in flagrant violation of UN sanctions.

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