Cyprus Mail: News Articles in English, 00-01-08

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From: The Cyprus Mail at <http://www.cynews.com/>

CONTENTS

[01] Blackout breach forces Clerides into a damage control exercise

[02] Cyprus opens door to foreign investors

[03] Car importers want imports of sulphur-free diesel

[04] Trio tight-lipped on bank job

[05] ‘Only the CTO can revoke ads decision’

[06] Regulatory body planned for Cyta

[07] Government offers to pay half of foundry’s renovation

[08] Mother and son suspected of robbery

[09] Bomb warning ignored as shares continue slide

[10] Denktash defends his campaign against Avrupa

[11] Man dies in highway smash

[12] Brief quake in Limassol

[01] Blackout breach forces Clerides into a damage control exercise

PRESIDENT Clerides was yesterday forced to engage in a damage limitation exercise after leaks from last week's National Council meeting wrecked a UN news blackout on the Cyprus proximity talks.

In a written statement referring to media reports and speculation which have emerged only since the December 30 meeting, Clerides said the "whole matter is regrettable".

Earlier in the week Clerides wrote to members of the National Council expressing his concern over the press leaks.

"Unfounded reports not only do not help promote a solution to the Cyprus problem, but on the contrary create confusion and bitterness in all those who are working on behalf of either the United Nations or their governments," yesterday's statement said.

Press reports said the UN had rejected the Greek Cypriot proposal on territory. "The United Nations recorded the proposal as they did with all the other proposals, without comment," Clerides clarified.

"It is equally untrue that the United Nations has proposed that a Federal Republic of Cyprus should have a President and a Prime Minister."

Clerides said the UN Secretary-general's special representative Alvaro de Soto has not made any proposal, nor has he proposed an equal distribution of powers. He added that the US special emissary for Cyprus Alfred Moses has neither made observations nor expressed any views on the Greek Cypriot positions. "He did not exert any pressure either," Clerides said.

Until last week’s National Council meeting not a word had appeared in the press on what had been discussed at last month’s proximity talks in New York -- in line with the news blackout imposed by Secretary-general Kofi Annan.

But the following day Phileleftheros newspaper reported in detail that the UN was promoting the idea of constitutional changes to transform the government from a presidential democracy to a parliamentary one.

It also said that on the territorial issue Clerides supported the return of 66-75 per cent of refugees to their homes, and that an idea was put forward that the Turkish side would keep 24 per cent of the island as opposed to the current 37 per cent.

These reports have in turn prompted journalists in the north to put questions to Turkish Cypriot leader Rauf Denktash.

He has echoed Clerides' comments that no proposal was put to them on power sharing. But he did say he had been confronted with the issue of territory which he rejected outright.

"We will not look at territory or maps before the recognition of our sovereignty," Denktash was quoted as saying yesterday.

He said that during the New York talks de Soto told him he did "not know about Cyprus" and offered to look at a map but the Turkish Cypriot leader "jumped to his feet" and told him he would not look at any maps.

"(Former Secretary-general Boutros) Boutros-Ghali played this game with me," Denktash said. "He told me he did not know about Cyprus and we should look at a map. He took the map before him, looked at it and the next day he passed the map through the UN Security Council. I am not falling for the same trick."

Asked what he expects from the second round of proximity talks in Geneva starting on January 31, Denktash said: "No result will emerge from the Geneva talks. If the talks conclude with an agreement on continuing the negotiations in June then it means there is still some hope and that a path has opened up before us."

[02] Cyprus opens door to foreign investors

THE Central Bank yesterday lifted restrictions on European Union residents investing in Cypriot companies, as part of the island's harmonisation process with the trading bloc.

The decision is expected to prompt a huge flow of foreign investment into the island, according to Central Bank Governor Afxentis Afxentiou.

Afxentiou told Reuters the decision was a significant step towards deregulation. "We expect to see a flow of foreign investment into the country both in the form of direct investments and in the form of equity investments in companies operating on the stock exchange," he said.

Restrictions on Cypriot nationals investing abroad have also been lifted, but only as regards direct investment in foreign companies – portfolio investments are still ruled out.

Restrictions which control how much an EU resident may invest directly in a Cypriot company are no longer in effect as of yesterday, a Central Bank statement said. Formerly, in some sectors, foreigners were restricted to a maximum of 49 per cent in a company in Cyprus with the Cypriot partner retaining 51 per cent.

Commerce, Industry and Tourism Minister Nicos Rolandis told the Cyprus Mail yesterday that although there are cases in restricted sectors where foreigners have been granted approval to own a majority share in Cypriot companies, the decision to lift restrictions has now "generalised" the practice. Up until now, he said, approval was done on a case by case basis, with the co-operation of the Central Bank and the relevant government services.

"This is a good move," Rolandis said referring to yesterday's announcement. "It's a move which is in line with our EU accession and will benefit tourism, trade and other sectors as well."

The Central Bank has also lifted restrictions on the how much an EU resident is allowed to invest in the capital of a Cypriot company listed on the Cyprus Stock Exchange (CSE), allowing for up to 100 per cent participation. However, banks are exempted from this provision and foreigners will not be allowed more than a 50 per cent participation.

Existing regulations regarding other foreign ownership such as property will still apply to all foreigners.

Restrictions on Cypriot nationals investing abroad have also been lifted but only as concerns direct investment in foreign companies.

Cypriots will now be free to invest any amount they choose in foreign companies without any exchange control restrictions. But the Central Bank must be satisfied that it is a direct investment in a foreign company and not an investment in stocks or bonds.

"A direct investment is considered to be at least 10 per cent, otherwise it will be seen as a portfolio investment," the Central Bank statement said. Restrictions on deposits by Cypriots in foreign banks will also remain in force.

The Central Bank added that the lifting of restrictions does not relieve any individual or company of their obligations to keep the Central Bank informed of their activities.

[03] Car importers want imports of sulphur-free diesel

THE Association of Motor Vehicle Importers yesterday asked Commerce &amp; Industry Minister Nicos Rolandis to let the petroleum companies in Cyprus import sulphur-free diesel fuel because the refinery's product is ruining the island's diesel engines.

"They want to see if we can issue import permits for diesel without sulphur, the way unleaded petrol is allowed to be imported," Rolandis said.

He conceded the "bad quality" of most of the island's petrol for containing lead, and "the bad quality of our diesel, which contains sulphur".

"The content of sulphur (in diesel) is as much as 20 per cent higher than that allowed by the European Union," he acknowledged.

"Of course we're going to upgrade the refineries, but it will take two or three years," he said. "And by that time there will be no sulphur. But they say that this diesel destroys the diesel engines, and they would prefer we import it now."

The Minister agreed that the quality, especially of the diesel, is "not what we should have. But after all, this has been the quality we have had since 1970. And now we have reached the millennium, 30 years later, one wonders why these people have awakened all of a sudden."

"In principle, we shall look into it," Rolandis said, adding that he told the car importers: "We shall have a word with the oil companies, in case they are prepared to go to the trouble to import small quantities of sulphur-free diesel fuel... If they would like to import it, I shall not stop the imports."

[04] Trio tight-lipped on bank job

THREE SUSPECTS being held in connection with Wednesday's raid on the main Limassol branch of the Popular bank were reportedly keeping tight-lipped yesterday.

George Yiannides, a 28-year-old Greek Pontian living in Kiti village near Larnaca, Demetris Tantis, 22, also from Kiti, and his mother Chrysanthi, 46, were, according to police sources, declining to answer investigators’ questions.

Yiannides, Tantis and Chrysanthi were remanded in custody for eight days by the Limassol District court late on Thursday. The court released three other suspects arrested in connection with the same raid. They were Yiannides's mother Tamara, his wife, Christothea Harpa, and Tantis' cousin, restaurateur Michalis Michail, 22, from Pervolia outside Larnaca. The court decided there was insufficient evidence to justify their being remanded.

Police say Tantis and his mother have admitted to being involved in Wednesday's £24,000 heist. Tantis, according to police, has admitted to carrying out Wednesday's raid and has named Yiannides as his partner in the hold-up. Chrysanthi has admitted to acting as a getaway driver for the two robbers, police say. Yiannides is apparently denying any involvement.

The arrests came after police tracked down a hire-car they believe was used by the two armed robbers after a tip-off from a member of the public. Two hoods, two helmets and a sawn-off shotgun thought to have been used in the raid were found in the car.

Police say they have also found all but a few hundred pounds of the £24,000 taken in the raid.

Limassol CID also say they have evidence linking the suspects to a raid on the same bank on October 13 last year. On that occasion, armed robbers got away with £58,000.

The two raiders who burst into the Athens Street branch at 9am on Wednesday were distinctly cheeky, witnesses said. "Good morning and Happy New Year! We're back again: don't be afraid, stay calm and just raise your hands," they reportedly said in Greek before helping themselves to cash from the tills.

The raiders' reference to being "back again" prompted police to investigate the possibility that they were the same robbers who targeted the bank last October.

[05] ‘Only the CTO can revoke ads decision’

THE Attorney-general yesterday advised the government not to revoke a tender awarded by the Cyprus Tourism Organisation (CTO) to a multinational advertising firm.

Late last year the CTO decision was challenged by three local firms and prompted the involvement of Commerce Industry and Tourism Minister Nicos Rolandis.

A subsequent investigation by the auditor-general's office revealed that the tenders procedures had not been strictly adhered to "but she didn't say anything was really wrong," Rolandis told the Cyprus Mail yesterday.

The Minister said that after that he himself briefed the cabinet on the issue, which was also taken up by the House of Representatives at committee level.

"We left it at that and the Council of Ministers decided to ask the Attorney-general for legal advice," Rolandis said.

In a five-page ruling yesterday, Attorney-general Alecos Markides said the Minister had no authority to intervene on this issue. He said only the CTO could reverse its own decision -- which it has decided not to do.

Markides said he could not countenance such a dynamic measure as a ministerial revocation on this issue, saying that such a move could be successfully challenged in the Supreme Court.

He also pointed out that if the decision is reversed at this stage the CTO would have to re-tender the contract, which would mean it would not be in time to advertise Cyprus abroad for the summer season.

"Therefore the only thing in my opinion which is left to be done is for the Minster to notify the CTO board that he has no intention of intervening in the recent CTO decision not to revoke the approval of the tender," Markides said.

Rolandis said Markides made it quite clear that only the Supreme Court can make a decision on this issue. It was reported yesterday that the three local firms has already taken steps to follow this route. "It's up to them," Rolandis said. "We shall not do it. If we do not proceed we will have no advertisements in overseas markets. We are already not advertising in January."

This year's advertising is even more crucial to Cyprus tourism because the island is hosting the Miss Universe contest in May.

[06] Regulatory body planned for Cyta

Speaking after a multi-department meeting on the island’s telecommunications and its harmonisation with the European Union, Averof Neophytou said that the issue of a regulatory body was separate from that of privatising the Cyprus Telecommunications Authority (Cyta).

He said that an adviser would be chosen by the Tender Board within the next few days and would be responsible for drawing up a remit for the body and preparing a new telecommunications policy.

The regulatory body would have to be formed before telecommunications liberalisation took place, Neophytou said: "It will be an independent authority controlling the quality of our services and the prices charged to the consumer. Without government control ensuring healthy competitiveness, an oligopoly could lead to a cartel which can be worse than a monopoly."

He also said that the public would ultimately benefit from the liberalisation of telecommunications.

"The first to benefit is the consumer because through healthy competitiveness, better quality services are offered at lower prices," Neophytou said.

Also attending the meeting were Attorney-General Alecos Markides, Cyprus' EU Accession Negotiator George Vassiliou, Communications Ministry director Dr Vassos Pyrgos, Cyta chairman Michalakis Zivanaris and Cyta director Nicos Timotheos.

[07] Government offers to pay half of foundry’s renovation

LABOUR Minister Andreas Moushiouttas said yesterday the state will subsidise half the cost of modernising the Marios &amp; Andreas foundry's chimneys, but Nicosia District Officer Andreas Papapolyviou said its owners do not want to close for renovation.

Moushiouttas told the Cyprus Mail the law allows the Ministry of Commerce, Industry and Tourism to pay 30 per cent of the cost of renovating the foundry's chimneys.

As well, he said, on December 5 the Council of Ministers decided to "subsidise them for another 20 per cent" of the cost. This would mean 50 per cent of the whole cost being met by the government, including losses incurred while closed.

The foundry's emissions have been found to contain high levels of lead and cadmium. These have been blamed for high rates of brain, kidney and pancreas cancer, and respiratory diseases found in residents of Ergates village, near the foundry.

The Cabinet directed Papapolyviou to convey the government's proposal to the foundry's owners, Marios Petrou and Andreas Georgiou, of Nicosia, "and discuss with them what the compensation will be if they stop working the foundry until they install the new filters", Moushiouttas said.

No deadline was set for a response from the foundry's owners, the minister added said. "The whole subject is open, and maybe on January 12, when we have the next meeting (of the Council of Ministers), the Minister of Interior -- under whom the district officer works -- will have something to tell us."

Asked what would happen if the foundry's owners reject the government plan, Moushiouttas replied: "I think the Attorney-general will deal with the matter, and maybe the court will be the second option."

Markides confirmed the details of the government's offer. He suggested the subsidy was crucial because the offer included the requirement that the foundry bring its emissions to 50 milligrams of particulate per cubic metre of smoke.

This standard not only far surpasses the Cyprus limit of 300mg of particulate per cubic metre of emission, but will not even be required by the European Union until sometime in 2004, Markides said.

"The idea of the government is to help them... comply within the next few months, and before the resumption of work," Markides said -- assuming the foundry shuts down for the renovation.

"The Council of Ministers... is trying to reach an agreement to convince them not to resume work until the foundry is in a position to comply with the new European Union directive" on pollution, Markides said. "But if there is no agreement," he added cryptically, "it is another matter."

He did not elaborate, but did note he was continuing to prosecute the foundry for its previous alleged violation of the 300mg emission standard.

District Officer Papapolyviou said that when he broached the offer with the foundry's owners, they did not like the idea of shutting down while modernising the chimneys, and wanted to remain open throughout the work.

He said he expected that some sort of committee would be formed to discuss their objections.

[08] Mother and son suspected of robbery

A 15-year-old Russian boy and his mother were remanded in custody yesterday on suspicion of committing a series of break-ins.

The pair, who live in Paphos, were arrested on Thursday after a raid on a restaurant on the beach road to Chlorakas.

Six bottles of whisky, three bottles of vodka and £50 in 50- and 20-cent pieces were taken in the burglary.

Police say a search of the Russian family's property uncovered around £130 in 50 cent pieces, which the woman tried to hide by wrapping them in clothes and throwing them out.

The money, as well as a variety of goods from kiosks, is believed to be the loot from a series of burglaries.

Mother and child both appeared before Paphos District Court yesterday morning and were remanded in police custody for five and eight days respectively.

[09] Bomb warning ignored as shares continue slide

Slipping for the third session running, shares were off 3.33 per cent as turnover just managed to surpass £19 million on 4,394 trades. The all-share index was on decline throughout the hour-long session.

Opening at 675.79 which was its intraday high, it fell to as low as 663.27 before edging slightly up to a close of 664.03 -- 22.88 points, or 3.33 per cent, lower than on Wednesday. Thursday was a market holiday.

Some floor traders have queried the drop, which has skimmed 6.99 per cent from the general index since December 30, the last day of 1999 trading.

Traders, who spoke on condition of anonymity, said the market was being affected by bearish signals put out by some brokerages, while one claimed that the market was being manipulated.

"Certain people have an interest in seeing the market lower... they want to buy on the cheap," said one trader. Buying at lows now would give their portfolios a boost at the end of the year when everyone starts buying again, the trader said.

Similar allegations were made by Akel deputy George Lillikas in the House of Representatives last week. The brokers’ union has urged anyone who has such information to get in touch with the authorities.

Other brokers were unsure that any single group had the power to sway the market, however. "I don't think anyone has the influence to affect the stock exchange for any more than a couple of minutes," said stockbroker Costas Hadjigavriel.

A bomb threat -- the second this week -- was phoned in shortly before the end of yesterday’s session but it was ignored by the bourse, which did not even inform traders or investors on the floor.

Police were called to the stock exchange building but nothing suspicious was found.

"Some people have nothing better to do," said one CSE employee.

The market has been on the downside since touching an all-time high of 849 points in late November. A liquidity drain at commercial banks, which were lending heavily to investors in the first few months of 1999, and investors chasing new and cheaper issues has pushed the market down since then.

All seven sectors moved lower. Commercial companies tumbled 5.56 per cent, investment companies were 4.3 per cent off, and tourism stocks closed 3.2 per cent lower.

Blue chip banking stocks, which resisted pressure earlier in the week, were down 3.14 per cent as Bank of Cyprus shed 31 cents to end at £10.24 and the Popular Bank at £13.45, 35 cents lower.

Traders said the fall was unrelated to a report issued by Moody's Investor Service on Wednesday which said that credit ratings of Cypriot banks were likely to come under negative pressure as the island moves to deregulate its economy and banking sector.

"I don't think our investors read Moody's," said one analyst.

Hellenic, Bank of Cyprus and Popular all have deposit ratings assigned by Moody's of A2/Prime-2.

Bank of Cyprus and Popular have financial strength ratings of C, while Hellenic is rated D+.

"Going forward, the financial strength ratings for Cypriot banks may come under pressure as the financial and economic liberalisation measures that Cyprus will have to take in order to prepare for EU membership

alter their operating environment at home," the Moody’s report said.

[10] Denktash defends his campaign against Avrupa

TURKISH Cypriot leader Rauf Denktash has hit back at a campaign pleading with him to drop a crippling suit against Avrupa newspaper in the north.

The paper, an outspoken opponent of the Denktash regime, has been ordered to pay $260,000 to the Turkish Cypriot leader in a slander suit.

Avrupa had suggested that Denktash had had shady dealings with the British colonial rulers in the 1950s.

The newspaper and six of its journalists are also being prosecuted before a Turkish military court on charges of "inciting among the people hate against the Turkish Cypriot state and undermining the security forces".

The heavy payout has put the future of the newspaper in serious jeopardy and caused outrage in journalistic circles on both sides of the Green Line.

It has been condemned by the Cyprus government, the opposition parties and the Union of Journalists which has appealed to international organisations to persuade Denktash to change his mind.

But in an interview with Turkish Cypriot TV, Denktash defended his stance. He accused Avrupa of pursuing a mission to create a rift between Turkey and the Turkish Cypriots and of undermining "his national struggle".

This effort was being supported by the Greek Cypriots, he added.

Denktash also accused ‘Prime Minister’ Dervis Eroglu, his main rival in the upcoming ‘presidential’ elections, as being another supporter of Avrupa.

[11] Man dies in highway smash

Senior Forestry Department worker Charalambos Fournides, 48, died instantly in the 6.50am crash on the Limassol-Nicosia highway.

Police said it was not yet known how Fournides hit the mini-van, which had been temporarily abandoned on the side of the highway near the Mari turn-off after engine trouble.

His car then veered back on to the highway and into the path of a container truck driven by 24-year-old Loucas Zoumbakis, a Greek national now living in Limassol.

Police said no arrests were made in connection with the accident in which all three vehicles were badly damaged.

[12] Brief quake in Limassol

The head of the Geological Surveys Department told CyBC that the tremor was an aftershock from the August 11 earthquake.

Witnesses said it lasted only one to two seconds and was not very strong. There were no reports of damage but some residents panicked and opted to spend the night in their cars.

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