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Our View: Selective respect for the law over foreclosures

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AN IMPROVISED bomb exploded outside the Nicosia offices of the CRI Group which specialises in corporate recoveries and insolvencies. A suspect was arrested, while the company’s director, Chris Iacovides accused the police of ignoring his complaints that he had received threats from managers of a business in Paphos that had been placed under administration.
While the threats cannot be linked to the explosion, which is being investigated by the police, a more general issue emerged – the state’s failure to enforce the law. Iacovides claimed he had been receiving threats when he tried to act on a court order issued last August placing a Paphos hotel under administration because of its failure to service its bank debts. He had repeatedly tried to take control of the hotel, but the management refused to allow him, showing complete disregard for the court order.

Paphos police who were called by the administrator as recently as last week, when he once again tried unsuccessfully to seize control did nothing. A police spokesman said they had no obligation to assist the administrator seizing the property as the court order had no provision instructing the police to do so. The only responsibility of the police was to maintain the peace, the spokesman said.

It is quite astonishing that a court order could be ignored so blatantly for four months without anybody being able to do anything about it.

Questions are raised about the rule of law when it comes to foreclosures. Political parties have a big responsibility for the situation, as for years now they have been campaigning against foreclosures, presenting them as a form of evil.

As one economist told the Cyprus Business Mail, “politicians give an impression that there is and there should be flexibility when it comes to foreclosures.”

The rhetoric used by politicians on the matter suggests that people are not obliged to honour the contracts they signed and implies that banks seeking to recover the debts were acting unlawfully. It is as if populism has replaced rule of law.

What is the point of signing contracts and the courts issuing orders when politicians argue that it was acceptable not to enforce them? Our politicians love to speak about the rule of law, but see nothing wrong with taking a rather ambiguous stand towards it, giving the impression that in some cases it does not have to be respected. When Hellenic Bank tried to execute a foreclosure a few months ago there were members of Akel outside the house protesting against the decision.

No wonder the owners of the Paphos hotel, who defaulted on a €5m bank debt, ignore the court order and refuse to allow the administrator to do his job. They have heeded the message of politicians that when it comes to foreclosures the law does not have to be respected.

 

 

 

 

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