Former president Demetris Christofias apparently failed to honour his financial obligations towards his erstwhile friend, contractor Miltiades Neophytou, who has made some damning claims in court concerning Akel and Omonia football club, as part of his €21m civil lawsuit against Christofias.
That the two men had fallen out a few years back is nothing new, but Neophytou’s claims shed light on how Akel operates, especially as regards Omonia, which, despite denials, it uses to rally its voters.
During Wednesday’s hearing, Neophytou submitted a statement detailing his relationship with Christofias, which ended in acrimony when it transpired that the contractor would not be getting his money from several jobs he had carried out and capital he poured into the football club, which he chaired for several years.
Neophytou said he met Christofias in 2001, when he was House president and the contractor was renovating the parliament building.
The two became friends and Christofias hosted Neophytou frequently at his holiday home at Kellaki, which at some point he asked the contractor to renovate.
Neophytou agreed and an informal agreement was made for Christofias to foot the cost of the work only.
The total amount paid by the company for the work at Christofias’ holiday home was €280,787, not including VAT.
While the project was in progress, the former president asked for further work to be done, including extensions to the dwelling.
“The agreement we had with Mr Christofias was that he would pay the cost of the work when it was completed or whenever I asked,” Neophytou told the court, reading from a prepared statement.
During the work at Kellaki, Christofias also asked Neophytou to renovate his home in Makedonitissa, Nicosia.
He did not ask about the cost, but he agreed to pay whatever the contractor spent on the project, which included bulletproof windows.
That construction in Nicosia cost in excess of one million euros.
An invoice for €607,200 was issued for the first time in December 2011, with Christofias paying €270,285 in three instalments between January and July 2013.
The project included the extension of the house and the addition of one floor. Before the work, the house comprised of a basement, ground and first floor.
“The defendant wanted to be personally involved in the work and make all the decisions, even about the small things. For example, the defendant decided about the location of the fireplace, the material used, the kitchen layout, and the type of marble used.”
As regards the second floor, the company was receiving its instructions from the defendant’s daughter.
The first and second floors are occupied by Christofias’ two daughters. The former president wanted the ground floor fixed for his son. He said he planned to stay permanently at Kellaki after retirement but he had the basement renovated for when he visited.
Also, according to Neophytou, an additional invoice for €84,240 was issued on December 21, 2012.
“The defendant never protested about these invoices,” the statement said.
Neophytou stressed that the two invoices included part of the work done at Kellaki and part of the work in Nicosia.
He said the company’s accounting system issued invoices with the sum total of all the jobs.
“The total amount owed by the defendant is calculated on the basis of the company’s actual expenses. I repeat, the defendant was not charged any amount beyond the cost.”
During that time, Christofias had to submit his capital statement, the court heard. In May 2013, the contractor’s general manager received an email from the former president’s accountant, Pola Kyprianidou, asking them to pre-date the receipt so that it looked like he had paid the €200,000 he gave in January 2013 at an earlier time.
“We checked if this could be done but were given legal advice that it was illegal,” Neophytou said.
Neophytou also detailed how he repaired a property for Christofias to use during his presidential election campaign but was never paid for it.
He then spoke about his days as chairman of Omonia, claiming that Christofias had pulled strings at the Bank of Cyprus and RCB to increase the contractor’s overdraft, without the required collateral, so that cash could be poured into the club.
“One of the main problems he faced, as he described it himself, was Omonia’s poor showing, which he feared would have an impact in rallying Akel supporters behind his candidacy,” Neophytou said.
After his election in 2008, Christofias and Akel leader Andros Kyprianou pleaded with Neophytou to take over the team, which was in need of urgent help.
Neophytou said he was concerned because he did not know much about football, but Christofias sought to allay his fears by telling him to follow his personal instructions.
“When I asked about the expenses, he told me ‘it is my issue’” and “he would see to it to cover all the money me and my company would pay.”
The plan was for Neophytou to pay the money, which was going to be returned to him through Akel-controlled companies.
Everything was going smoothly at first but Christofias’ popularity plummeted – due to the 2011 Mari naval base blast that killed 13 people and incapacitated the island’s largest power station, and his handling of the economy – leaving him with no chance of re-election.
Neophytou said he paid €21.6m between March 2008 and September 2012, when he resigned from the team.
During that time Omonia won a championship and two cups but failed to progress in Europe. The side, one of the biggest in the country, had signed up many players on lucrative contracts, ending up struggling for survival and was only kept afloat by its loyal supporters.
At the end of 2011 it urgently needed €2m to pass UEFA’s financial criteria to avoid sanctions. Christofias allegedly called Neophytou and asked him to travel to Limassol to meet the chairman of RCB who would loan him the money.
RCB agreed to loan the money but because the deadline was looming, Christofias pulled strings at BoC to raise the contractor’s overdraft and the money was paid from there.
The loan was granted to Omonia with the only security being Neophytou’s personal guarantee. RCB later sued Neophytou as the guarantor.
Neophytou filed a separate lawsuit concerning that case. Omonia announced recently that it had come to an arrangement with RCB and the case was closed.
Neophytou said €678,332 was returned to his company by the club, and €5.9m came from New Winner Investments Ltd, a company controlled by Akel.
Omonia’s organised supporters reacted on Wednesday by issuing a statement challenging Akel to respond. Gate 9, as they are known, have been at loggerheads with the party over the plight of the club.
“Let those who banned us from attending the general meeting four years ago where Miltis announced the debt and the members were applauding, tell us how they feel. When we announced a march outside the party they hastened to characterise us as dark forces and spoke of ulterior interests; where are they today?”
In a statement on Wednesday, ruling Disy said the matter must be investigated, especially how a – Akel-controlled — company can make payments to a third party for opaque reasons.
“How did such companies have such financial ability and how could they justify the apparently bogus payments, which in reality paid off Omonia’s debt to this businessman?”
The case continues.