Government spokesman Kyriacos Koushos denied on Friday that the law firm he was a partner in had drafted the agreement to hand over the management of over €7bn in bad debts to a private company without any bids, in what the auditor-general described was a major scandal.
Speaking on state radio a day after the disclosure in the House watchdog committee, Koushos said that the agreement between the co-op bank and Altamira had been handled by large overseas firms.
“I really cannot understand why it was even brought up,” he said.
The spokesman said the firm, Koushos, Korfiotis, and Papacharalambous were Altamira’s legal advisers after it had registered a company in Cyprus and that was nothing to be ashamed of.
“On the contrary, I consider it an honour that a large organisation chose the firm where I was one of the many partners,” he said.
Speaking before the watchdog committee on Wednesday, Auditor-general Odysseas Michaelides said the contract had been drafted by Altamira’s lawyers.
“It’s a major scandal… an agreement involving the state being drafted by a private entity rather than the state,” he asserted.
MPs were revisiting the details of how the cooperative struck a deal with Spain’s Altamira in the first place, and what that agreement entailed.
Nicos Papaesftathiou, an attorney with the Tassos Papadopoulos & Associates law firm, said their sole connection to the Altamira affair was when they were asked to furnish a legal opinion on whether the cooperative is a body governed by public law.
The law firm opined that the cooperative was legally not a body governed by public law, and that by extension it was not obliged to adhere to the law on public procurements – which mandate calling for tenders for contracts worth over a certain amount.
It turned out the cooperative never called for tenders, negotiating only with Altamira, who landed the contract.
According to Papaefstathiou, the cooperative was, nonetheless, a state-run business – and as such it ought to implement the general principles of administrative law and public competitions in general.
The auditor-general said that in November 2017 the cooperative and Altamira (Spain) inked the first deal; and subsequently on January 23, 2018 an updated agreement was signed between the cooperative and Altamira Cyprus.
The cooperative dispatched this document to Altamira, and it landed on the desk of Varnavas Kourounas – at the time a senior manager with the asset management company.
Kourounas had previously served as the cooperative’s head of division in charge of managing its non-performing loans, which eventually brought it down.
Speaking on behalf of the government this time, Koushos said the €7.5bn in bad debts were not given away.
He rejected opposition accusations that the collapse was the administration’s fault.
“It is not an accident that after it closed, ratings agencies upgraded Cyprus to investment grade,” the spokesman said.
A subsequent probe ordered by the attorney-general mainly blamed former finance minister Harris Georgiades for the collapse of the lender and its subsequent sale to Hellenic Bank. It also recommended further investigation into whether former CEO Nicolas Hadjiyiannis and other executives had committed any other offences.