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Scandal surrounds Larnaca land registry

Odysseas Michaelides

Auditor-general Odysseas Michaelides suggested criminal offences may have been committed in the process of housing the Larnaca land registry in its current building during discussion of the issue at the House watchdog committee on Thursday.
Michaelides voiced his conviction in a letter sent to the attorney-general on Wednesday, speaking of a massive scandal.
“The picture we have is that possibly various individuals in public authority, separately or in collusion, arranged for the acquisition of the building at a price that was highly unprofitable for the state, in a manner that falsely showed a reasonable and advantageous price, and engaged in actions after the fact, when there was parliamentary scrutiny, to cover up wrongdoings,” the auditor said.
The auditor’s report described the procedure for the acquisition of the building as a concealed direct assignment to a land owner to construct a public project, bypassing legal processes, in a manner and at a cost that constitutes squandering public money for the benefit of a private citizen.
The building was rented in the summer of 2008, and some 18 months later the cabinet decided to buy it.
The initial rent agreement included a lease-to-buy clause which stipulated that the amount paid for rent until the day the clause was triggered – €933,000 – would go towards the acquisition.
The government eventually decided to expropriate the building following the decision of a three-member committee set up for the particular issue, and the clause went out the window.
The audit service said the state eventually forked out €14.2 million, or around €15.2m when the rents to date were factored in.
The land registry had valued the building between €11.5m and €13.7m, without taking into account the rents.
The public works department valuation estimated the building’s market value to be €8.5m.
Michaelides said the cabinet’s decision to buy the building had been violated by the decision of the committee to appropriate.
The committee was made up at the time by former treasurer Lazaros Lazarou, former interior ministry permanent secretary Lazaros Savvides, and finance ministry permanent secretary Christos Patsalides.
The decision to appropriate exempted the owner from paying tax on the sale and the obligation to maintain the building for a specific period, the auditor said.
Patsalides told MPs on Thursday that the committee had recommended to the interior minister at the time, Neoclis Sylikiotis, to appropriate the building for €14.2m, a transaction that was in the state’s favour.
“That is why it was a recommendation to the interior minister. We were not authorised to make such a decision; the decision is made by the minister,” Patsalides said. “There are no illegal recommendations, there are no criminal offences in the recommendations, if there are any, they are in the decisions,” he added.

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