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Aristo Developers accuse critics of a witch hunt

Auditor-general Odysseas Michaelides

Aristo Developers has hit back at allegations that it made a killing off a supposed re-zoning swindle in Kouklia, Paphos, calling media coverage of the affair a witch hunt.

In full-page ads splashed across several local newspapers on Tuesday, the company and its CEO Theodoros Aristodemou said their accusers – starting with auditor-general Odysseas Michaelides – are casting aspersions without knowing or disclosing the full facts.

“We shall not tolerate the witch hunt at our expense… We too have rights, not only obligations in this country. We ask everyone, before they form an opinion, to hear both sides, which is the minimum standard for fairness,” the statement read.

According to a special report compiled by the auditor-general, in May 2007 the cabinet issued a decision where private lands in the Akamas were to be swapped with state-owned land in Kouklia.

The latter consisted of agricultural land and forest, so as an incentive to the private owners in the Akamas, the state lands in Kouklia were re-zoned as commercial.

The land exchange itself never materialised and in June 2018 the cabinet revoked the 2007 swap decision.

But the zoning change in Kouklia was not rescinded and is still in effect today, meaning that commercial development is allowed there.

The re-zoning of 2007 applied not only to the state lands in Kouklia earmarked for the swap, but also to adjacent land already owned by the developer.

The reason cited then for extending the re-zoning to the adjacent private tracts was to “ensure the functionality and accessibility of the forest land.”

Aristo Developers owned two tracts in the vicinity. The re-zoning into commercial drove up the value of those lands.

A 2018 valuation by the Department of Lands and Surveys showed that the smaller private tract (1,708 donums) was worth €31m.

The larger tract (2,315 donums) was valued at €83m in 2018. In 1980 it had been worth €4m.

This second tract was transferred to the Bank of Cyprus, settling a €90m debt the developer owed the lender as part of a loan restructuring deal.

Going on this information, MPs last week spoke of a re-zoning ‘swindle’ benefiting a certain businessman – meaning Aristo Developers.

For his part, the auditor-general is advising the government that, given the original land swap itself has been revoked, the re-zoning decision for Kouklia must be invalidated too.

But Aristo accused the auditor-general of cherry-picking information.

It pointed out that in June 2007 Dolphin Capital Investors acquired 85 per cent of Aristo Developers.

“Dolphin is a publicly-traded company listed on the AIM sub-market on the London Stock Exchange, representing thousands of investors. Given that the zoning change in question took place seven months after the change in Aristo’s shareholding structure, how is it possible to conclude that it was only Mr Aristodemou who benefited?”

On why the private tracts were included in the re-zoned areas, the company said it was “very logical” since this real estate comprises 50 per cent of the land on which development is permitted in Kouklia.

The company said parts of its re-zoned land were upgraded to higher building ratios, while others were downgraded due to proximity to conservation areas.

“During the same time period, another parcel of land – which does not even border our property – was likewise included in a zone with a 25 per cent building ratio. But the auditor-general does not mention that.”

Regarding the €90m land-for-debt swap with Bank of Cyprus, Aristo noted the figure should come as no surprise.

“The 226,397 square metres were exchanged for €7,386,300, and it is in relation to this that so much has been said about so-called ‘cons’ and ‘making a killing’ when citing the €90m.

“But they don’t take into account that, included in the €90m transaction, were another 2,869,083 square metres of land worth €82,603,700, of the same title, which included the largest section of two golf licenses and related developments, which explains the high value.”


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