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Audit boss accuses Koursoumba’s spouse of being a strategic defaulter

Auditor-general Odysseas Michaelides

By Elias Hazou

LAW Commissioner Leda Koursoumba on Thursday denied that her husband had part of his debt to the Cooperative Central Bank (CCB) written off, amid allegations that her spouse had lied to the bank about his real income.

In the latest episode of the showdown between Koursoumba and auditor-general Odysseas Michaelides at the House watchdog committee, the official had to fend off allegations that her husband had either got preferential treatment from the CCB or, worse, as a debtor he had misled the lender about his income.

Turning the screws on Koursoumba, Michaelides said the bank wrote off €37,000 of her spouse’s debt, “money which taxpayers are now saddled with.”

The arrangement was made while the bank was state-run.

In total, Koursoumba’s husband owed approximately €110,000. He had initially asked for €60,000 of that amount to be written off.

“He’s a classic example of a strategic defaulter,” Michaelides remarked.

According to the auditor-general, the initial loan was €51,200, taken out in September 2000. Koursoumba’s husband never paid any installment willingly.

“The man never concerned himself with the loan. He got the money and vanished.”

On the two occasions that he did pay down his debt, this was only after arbitration proceedings. From 2005 onward, he never paid again.

Moreover, when he filed a request for his outstanding debt to be written off, he stated falsely that his only income at the time was a €352 monthly pension.

However, it turned out that he had previously admitted to owning immovable property, and at some point stated that he had income from rent of about €2,000 a month.

In a solemn declaration he signed dated February 28, 2017, under the monthly revenues and expenses section, he did not disclose his wife’s income.

“Given that the CCB belonged to the state, and given that [CCB chief executive Nicolas] Hadjiyiannis has stated to this committee the bank was unaware that Mr Koursoumbas was the spouse of a Politically Exposed Person, tomorrow we shall inform the bank that their decision to write off €37,243 may have been the result of false pretenses,” Michaelides told MPs.

“Now that the CCB knows that Mr Koursoumbas’ household has other income, it may determine that it should not have written off this debt,” he added.

According to Michaelides, the loan was secured by two properties with a combined market value of €487,000 (€345,000 forced-sale value), while Koursoumba’s spouse possessed properties both in the north and south of the island.

Koursoumba herself denied her husband had asked for a debt write-off. Rather, his disagreement with the bank was over the compound interest, which caused an initial loan of €30,000 to shoot up to €112,000.

When the bank refused, her husband informed the financial ombudsman.

“Actually my husband was ruined financially, so how he could he have received preferential treatment?” she asked.

Ironically, the matter showed up on the auditor-general’s radar only after Koursoumba’s husband had used stationery from the Law Commissioner’s office in communicating with the financial ombudsman.

On December 7, 2016 the bank notified Koursoumba’s spouse that it was denying a prior request of his that part of his mortgage be written off. He was also advised to begin repaying the outstanding debt immediately.

According to the auditor-general, one week after the bank sent this letter, Koursoumba’s husband addressed a letter to the financial ombudsman informing him that the bank had denied his request.

The letter, sent by fax, bore the letterhead of the law commissioner’s office.

Koursoumba insists there is nothing untoward with this, explaining that at the time in question her husband was unemployed and did not have his own office or fax machine, which was why he used resources from her own office.

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