Palace Insider Influenced Old Airport Deal With Chinese Firm - Report

Update: An insider at the Presidential Palace reportedly fixed up a deal with Chinese firm Far Eastern Phoenix to develop the old airport terminal in Larnaca, according to a report in daily Politis.

Diplomatic Office Director Marios Ieronymides' wife was a director at a company that brokered the deal with Far Eastern Phoenix (FEP), says the report.

She resigned shortly before the deal was signed but was still a director while her husband was actively involved in negotiations with Far Eastern Phoenix and Hermes Airports.

In further developments, Filelftheros newspaper reports that Ieronymides was present in his capacity of director of the diplomatic service at negotiating and signing the deal with FEP. His wife, Tatiana Ieronymidou, may have stepped down as a director of FEP Ltd, but took up a position as shareholder and director of a related company, Far Eastern Phoenix Management Ltd, instead, reports Fileleftheros, citing research at the Registrar of Companies.

The question remains, why were the negotiations not in the Finance Ministry or Commerce Ministry's hands, given that these are the institutions normally in charge of financial or commercial matters on behalf of the state? And did Ieronymides benefit in any ways other than his wife's compensation at both companies?

Ieronymides went on the record to say that his involvement was purely in the capacity of his friendship with Yang Qi, the businessman behind the whole deal.

Political parties have called for an investigation into the allegations. The report raises major political issues touching once again on top government, said DISY in a statement. Obviously, the Chinese company's investment has fallen victim to the personal interests of the President's circle, according to the statement.

"Obviously the government negotiates the old airport into a company with no share capital that is owned 51% by foreigners...the government has chosen once again the path of opacity and unreliability," says the statement.

The president's term has made the Presidential Palace into a centre of nepotism and scandals, said the opposition's statement. Socialist party EDEK said that the report raises serious questions that need answers.

"What is the relationship of the diplomatic office of the President of the Republic with Chinese investment interests in Cyprus?" said EDEK's spokesman.

EVROKO's spokesman said that the public needs transparency and meritocracy in the government's investment projects. Strategic investments should be governed by terms that protect the public interest, he said.

The Greens made reference to a government 'bubble' filled with the gas of nepotism and self-interests.

Presidential candidate George Lillikas said an investigation should be carried out without delay by independent authorities, and that the unwritten rules of professional ethics should be respected.

The project was signed on March 23rd and is a massive shopping and distribution centre aimed at exhibiting Chinese products. The project will cost 600 million euros and is expected to create four thousand new jobs. The Chinese firm has a lease for 19 years with an option to extend to 50 years.

More complications arose after the owner of the property - a Turkish Cypriot - condemned the deal as a violation of his rights.

Hüseyin Helvacıoğlu says that Hermes Airports and the government have committed an 'illegal act' by leasing the land without his permission to the Chinese investor.

“The Greek Cypriot company, which seizes a property belonged to us and which signs an agreement for a 600 million Euros Chinese investment without getting permission from us, commits an illegal act," said  Helvacıoğlu in a written statement.

“The building of Larnaka Airport was built without getting permission from us. Now, they try to earn money by renting the properties that belonged to us and others.” He added that “I will not give permission to this. The property is belonged to me and to my brother and I want this property back. Nobody can use these lands without getting permission from us, above all they cannot hand over to others."

So far, there has been no government statement on the report, which follows hot on the heels of last week's scandal over semi-government board appointments.

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