The audit service censured the Cyprus securities and exchange commission (CySEC) over a conference dinner it held last year that was organised by a company in which a minister has an interest, without asking for any other bids.
According to the audit service report that was published on Monday, the April 8, 2019 conference dinner, had been approved by the SEC board in October the previous year without going to a tender process.
The report stressed that auditors found that the minister was not involved in any way.
The company had submitted a proposal for the event aiming at highlighting the importance of the commission in the island’s economy and efforts to establish Cyprus as a finance centre.
According to the proposal, the event’s budget would be drafted by the company, which would foot all the expenses and pocket all the revenue, which would come from sponsors, which would not include companies supervised by the SEC, and seat reservations.
The financial risk would also be assumed by the company, the proposal said.
Normal seats were sold at €250 plus VAT while a 10-seat Diamond Table cost €3,000 plus VAT. Gold Tables, also 10 seats, were charged €2,000 plus VAT.
“Based on our estimates, the company appears to have collected over €130,000 from the sale of tickets,” the report said.
The benefits for the SEC would be exposure in the media, which was valued at €30,000, and briefing the participants about its work and the latest developments in the sector.
The service said the fact that the event did not cost the SEC anything did not justify acceptance of the proposal.
As a public organisation, the SEC ought to adhere to the principles of good governance and it should have invited tenders if it judged that such an event was necessary.
SEC chairwoman Demetra Kalogirou told the audit service that the organisation was unaware of the minister’s link to the company. Kalogirou said the board’s decision to accept the proposal without asking for other bids was based on the facts that the company has many years of experience in organising such events and it would not cost it anything.
The audit service disputed the need for the event and its benefits arguing that the SEC’s objective and role was the supervision of the investment service market. The section of the event dedicated to the professional aspects of the sector was dramatically cut down in relation to the initial programme, the report said.
“Ultimately, the emphasis seems to have been on entertainment and socialising.”