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Cyprus

Five guilty in CyTA scam

File photo of Stathis Kittis (l) the day he was arrested

By Elias Hazou

LARNACA criminal court on Monday found guilty five persons and one legal entity accused in the high-profile trial concerning the purchase by CyTA’s pension fund of real estate in Dromolaxia at a massively inflated price.

The court delivered a guilty verdict on ex-CyTA boss Stathis Kittis; former Electricity Authority boss Charalambos Tsouris, who at the material time was a member of the board of directors of CyTA; AKEL member Venizelos Zanettos; Orestis Vasiliou, then head of CyTA’s employee union and director of Cytavision; land registry official Grigoris Souroullas, also a member of the company Polleson Holdings Ltd; and Polleson Holdings Ltd as a legal entity.

At the same time, the court acquitted the two other defendants in the case, jewellery shop owner Antonis Ioakim and former CyTA marketing manager Yiannis Souroullas.

The court will reconvene on December 31 to hear mitigation arguments from the lawyers of the defendants found guilty. The five were transported to the Central Prisons, and are to remain behind bars until that date.

Kittis was pronounced guilty on 16 out of 19 counts, including corruption of a public official, accepting bribes and legalising ill-gotten gains. The court said Kittis conspired to inflate the real cost of the Dromolaxia project, for which he took kickbacks totaling €300,000.

He also forged documents in a bid to give the veneer of legitimacy to a commercial agreement between Wadnic Trading and another company by the name of Leagros Investment Ltd, which would justify him receiving a €100,000 cheque from businessman Nicos Lillis, a key player in the whole deal.

Tsouris is liable for going along with the addition of 400 square metres to the Dromlaxia project, known as the Aero Centre. The added surface area unecessarily raised the project’s cost. He was also liable for drafting a report – which he submitted to the pension fund’s management committee – containing false data to that effect. He was found guilty of fraud, abuse of a public official’s fiduciary duties and obtaining moneys under false pretences.

Vasiliou took €450,000 in bribes as a sweetener to refrain from inciting opposition to the investment from CyTA unions.

Zanettos, the court said, was guilty of blackmail, as he threatened to block the Dromolaxia investment unless Lillis repaid old debts of Alki football club worth €650,000. Lillis was chairman of Alki at the time.

Souroullas received €250,000 from Polleson Holdings Ltd and from Vasiliou despite knowing that these were ill-gotten gains. Polleson Holdings, of which Souroullas was a member, was found guilty on the charge of money laundering.

The trial began in March 2014, and revolved around the purchase by CyTA’s pension fund of office space in Dromolaxia, at a price several times the going market value.

The property in question was bought by Lillis, of Wadnic Trading, a private company, from a Turkish Cypriot in 2010 for €10 million and sold the following year to CyTA’s pension fund for €22m.

The land coefficients were upgraded suspiciously fast while several high-ranking CyTA officials resigned in the wake of the investigation. The defendants were accused of getting kickbacks for greasing the property deal.

Arrests were made possible after Lillis switched sides and turned prosecution witness.

Lillis, who initially faced charges in a separate but related trial along with two intelligence service (KYP) officers, had the charges against him dropped after agreeing to testify against the other defendants.

In its 250-page verdict, the court noted that Lillis’ testimony was both reliable and sincere, and dismissed the notion – put forward by the defence throughout the trial – that the allegations were a fabrication to embroil certain individuals.

Presiding judge Nikos Sandis said nevertheless that the facts of the case show Lillis was an accessory in the affair and was found to have falsified documents.

Addressing criticism that someone complicit should be granted immunity from prosecution, the judge said that this was a common practice in legal systems in many countries.

“This is not something exclusive to Cyprus,” Sandis noted.

The verdict was quickly grasped upon by the parties. Ruling DISY sought to extract political capital, hinting that things have changed during the current administration. In a statement, the party said it was “satisfied” that justice was served, and expressed the hope for a similar outcome regarding other scandals that have seen the light.

For its part, AKEL insisted on the innocence of its cadre Zanettos, noting that he was not found to have taken any bribes.

The prosecution also filed a motion for authorities to seize the assets of Kittis, Souroullas and Polleson Holdings Ltd.” also Vasiliou’s assets.

The courtroom was packed with the defendants’ friends and relatives, AKEL cadres, AKEL MP Skevi Koukouma and Pambis Kiritsis, head of the left-leaning PEO trade union.

The guilty verdict comes amid a raft of ongoing police investigations into corruption and malfeasance, from the financial meltdown of 2013, dodgy contracts at the Paphos sewerage board, and match-fixing in football.

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