The House of Representatives late last night approved legislation providing for state support to the island’s second largest lender.
The item was passed with 43 votes for, none against, and three abstentions.
It enables the Republic to underwrite a €1.8 billion equity issue by the Popular Bank, heavily exposed to Greece and scrambling to meet a shortfall on its regulatory capital by a mid-year deadline.
The amount, equivalent to about 10 per cent of Cyprus’ GDP, forms the bulk of a €1.97 billion capital shortfall identified by the European Banking Authority, which the Popular Bank needs to replenish by June 30.
Popular was hit heavily by a write-down in its Greek sovereign bond holdings. It reported record losses of €2.8 billion in its full-year 2011 results, mainly on the back of a 76 per cent write-down in the value of some €3 billion in Greek bonds held.
The lender, the most exposed among Cypriot banks to Greek bond holdings, said in a statement yesterday that the Cabinet had approved plans to underwrite its capital hike.
In legislation submitted to parliament as a Ministerial Decree, the Finance Ministry said it would act as underwriter of the new €1.8 billion capital issue, which would be in the form of a rights issue.
The issue would be offered by priority to existing shareholders, to the public in a public offer, and to a small number of individuals with a private placement.
The Republic would acquire any undisposed of shares, by offering the Bank 12 month zero-interest sovereign bonds.
Any shares acquired by the state could be repurchased within five years either by shareholders, the bank itself or third parties.
The Republic reserves the right to sell its shares at any time to a strategic investor, with existing shareholders being given the right of first refusal.
Once the decree is published the state will be allowed to appoint up to five members of Popular's board – it now has 13 directors - who would have veto rights. Should the state acquire shares it would be entitled to appoint up to a majority of the board.
Dividends would also be stopped.
The exercise price of the rights was set at €0.10, with the share purchase price for the state at €0.10 and "fair value" for third parties.
The legislation further sets a cap on the salaries of the bank’s high-ranking officers and board directors, which in some cases results in an up to 12.5 per cent pay-cut.
An independent adviser would be mandated to submit a restructure plan to the central bank within two months of its appointment. Within six months at the latest, the plan would be submitted to the European Commission for approval.
The legislation was forwarded as a matter of urgency to the House Finance Committee, which began a lengthy session behind closed doors at 4.40pm with a view to preparing a final draft to be submitted to the plenum for a vote. Other legislative business was necessarily put on hold, with MPs deciding to sweat it out so that the new law could be published in the government gazette today.
The session was attended by Finance Minister Vasos Shiarly, Popular Bank chairman Michalis Sarris, representatives of the Central Bank and of the Cyprus Stock Exchange, and was observed by some 30 MPs from committees other than the Finance Committee. Shortly after 8pm the committee took a brief break before resuming discussion.
The plenum convened well past midnight, with the voting complete at 1am. Absent from the hall during the voting on the crucial bill were the leaders of the DISY, AKEL and DIKO parties.
In their closing remarks before the show of hands, several opposition MPs voiced their dissatisfaction at being cornered by the government to pass the bill on such short notice.
“Now is not the time to discuss how we got here,” said DIKO’s Nicholas Papadopoulos, alluding to the state of the Popular Bank. He added ominously: “I’m afraid that tonight we inaugurate our path towards a support mechanism. I hope I’m proven wrong.”
And DISY No.2 Averof Neofytou said: “Tonight, we vote based not on ideology or sentiment. We vote for our country, and to us, the country is above parties and ideology.
“Tonight was the easy part,” he went on to say, alluding to the next stage – whether the state can secure funds from lenders abroad.

 

HOW PREDICTABLE, in the end our deputies refused to surrender the scandalous privilege of not having to pay fines for traffic violations. Instead they thought of a laughable alternative arrangement aimed at fooling the public into thinking that something was being done. The arrangement served to highlight the low regard our self-serving deputies have for people’s intelligence.
From now on, the chairman of the House Institutions Committee Demetris Syllouris said on Tuesday, “we will follow the practice of the Attorney-general, informing the House President (of violations) who could then let the deputy know via his or her party leader.” And what would happen when the party leader is informed by the House president? Would he expel the deputy from the party, bar him from talking to the press or not allow him to stand for re-election? Perhaps he would tell him off and then forgive him, like parents would treat their naughty children.
In effect, deputies have decided to carry on the shamefully cheap practice of not paying their traffic fines. Self-serving deputies, who happily abuse the immunity given to them by the constitution to save a few euros, would feel no shame because they were reported to their party leader. But the worst of all is they are trying to fool people, by claiming that it was difficult to amend the constitution and then pretending that something was being done.
The truth is we should never have been discussing the need to amend the constitution in order for our lawmakers to show respect for the law. These are the people who should set the moral example by blindly obeying all the laws of the country, instead of finding cheap excuses about parliamentary immunity in order to disregard their obligations under the law. Whichever way we look at the matter, we arrive at the same conclusion - people who do not respect the law are morally unfit to be lawmakers.
What is offensive is that deputies show contempt not only for the law but also for people’s intelligence. Defending last Tuesday’s appalling cop-out, DIKO deputy Nicholas Papadopoulos, said that although the system may be abused, “deputies needed to be able to take on authority, the army (and) the police, when appropriate.” His argument was rubbished by Giorgos Perdikis, who quite rightly pointed out that free speech was not in danger from “the odd traffic warden” issuing a parking ticket.
He should also have added that deputies who would not take on authority for fear of being issued a parking ticket that they would have to pay, were pitiful cowards, unfit to represent anyone.

 

TWO people were yesterday still being treated in hospital for injuries sustained during violent incidents in Limassol and Nicosia following the Coca-Cola Cup final, which saw AC Omonia beat champions AEL on Wednesday night.
The mayhem resulted in 32 arrests, but only one was remanded for 24 hours. Ten of those arrested were charged in writing and released on the same night, while the other 21 – 16 in Limassol and five in Nicosia – were released after the district courts ruled there wasn’t enough evidence to support a remand.
Asked why, after all the damage and injuries, as well as 32 arrests, police managed to secure just one remand,  spokesman Andreas Angelides yesterday told the Cyprus Mail: “We investigated the cases and the suspects went to court. The police did their job, but the court didn’t approve the remands.”
Regarding a report by state broadcaster CyBC that police didn’t offer sufficient evidence to justify the remands, Angelides said: “I will not enter the process of commenting on something I haven’t yet been informed about.”
He concluded: “The remands weren’t approved but the investigation into everyone’s cases continues”.
According to the police yesterday, at a little before midnight, AEL fans gathered outside their fan club in Limassol and soon got involved in a fracas with Omonia fans, who were celebrating their team’s Cup victory nearby.
The violence resulted in a number of signs, and a public phone box near the Ayios Nicolaos roundabout being damaged.
It took strong police intervention to bring the situation under control with the use of tear gas, resulting in 18 arrests of people aged between 16 and 39.
Angelides said the force had been on patrol all of Wednesday night and claimed police managed to avert an even worse outcome.
A 20-year-old man is being treated at Limassol General Hospital with head injuries, while another man from Nicosia is in Nicosia General Hospital with fractures, cuts and bruises after being one of a number of drivers attacked in their cars by some 50 hooded men outside the fan club of Omonia’s rival Nicosia team APOEL.
In another serious incident, a 19-year-old Omonia fan was attacked while riding his moped past the Ayios Nicolaos roundabout in Limassol. A man hit him with a crowbar on the back, knocking the 19-year-old off his bike. When he remounted and attempted to flee the scene, a number of fans sped after him in a car and one drove into the back of his bike, again knocking him to the ground. Not content, the fan threatened to drive over the teenager while he was on the ground, but apparently changed his mind at the last minute.
The 19-year-old managed to escape serious injury, but was treated at Limassol’s state hospital for cuts and scrapes all over his body. Apart from the injuries, serious damage was caused to property – public and private – as well as parked and moving cars.
And on Makarios Avenue in Nicosia, a large number of Omonia fans gathered outside the Lykavitos police station causing public disturbance, throwing firecrackers, Molotov bombs and stones, while also setting a number of dustbins on fire.
Police intervened and arrested seven people, who were charged and released, while the crowd dispersed.  Others were arrested throughout the night, including a 40-year-old man with tear gas in his possession and a 23-year-old with firecrackers.
Outside the APOEL fan club near the Hilton Hotel in Nicosia, some 50 hooded men with their faces covered gathered to throw stones and other objects at passers by.
Apart from the man who is still being treated, another man reported being attacked while in his car and beaten on various parts of his body. Both cars were seriously damaged in the incidents.
According to the CyBC yesterday, after a long procedure, Limassol District Court rejected the police’s request to remand 16 of the 18 fans that were arrested in the town, saying the police didn’t manage to prove the suspects’ involvement in the violence.
The judge conceded that public disturbance and malicious damage had indeed taken place, but told police that there was no reasonable legal justification to order their remand, as the police didn’t present any witness accounts for each of the suspects to justify their arrest, let alone a remand.
Asking for the remand, police reportedly made a general statement that the 16 suspects were involved in a general case of public disturbance and damage. All 16 were released without charge.
The Ayios Nicolaos roundabout in Limassol was also turned into a battlefield two weeks ago when AEL won the championship and fans caused mayhem, destroying public property and getting into fights. Appalled residents reported a complete lack of police presence.

CELEBRITY Greek-Italian chef Ektoras Botrini has undertaken the massive project of supervising the creation of the menu, along with teams of chefs and sous-chefs, at the International Conference Centre and Philoxenia during Cyprus’ EU presidency.
According to a representative at IMH, one of the companies undertaking the management of the Conference Centre, the massive project involves the cooking of around 100,000 meals in total from five course seated meals, to buffets, finger buffets and even coffee breaks for delegates, all the way up to the ministers.
“I’m responsible for co-ordination and I’m (also) advising them if anything should go wrong or if there is anything lacking,” Botrini told Greek newspaper, Imerisia online.
I have also checked all of the menus and will personally cook for the escorts of the finance, foreign affairs and prime ministers, he said.
Botrini’s involvement in the catering was revealed on Tuesday at the official opening of the Conference Centre, when Botrini appeared in full chef gear overseeing the reception.
The menu at the reception consisted of various dishes, salmon as a first course, mushroom risotto as a main course and ice-cream with goat’s cheese, tomato jam and lemon cream for dessert.
Despite being a top chef in Greece, Botrini shot to fame in television show Kitchen Nightmares (based on the UK’s Ramsay’s Kitchen Nightmares) where the chef is invited to various restaurants to give them a new lease of life, and in many cases to save them from bankruptcy. He is not only known for excellence in the kitchen but his wild temper and pursuit of perfection.
He has various restaurants throughout Greece, including Botrini’s in Athens and Etrusco in Kerkyra.
The management of the Conference Centre during the presidency is a joint venture between IMH (which organises conferences and seminars) and P.H.C (Franchised Public Restaurants Ltd). Botrini was asked to take on the task due to good relations with the management, said the IMH company representative.
Botrini said that he has never undertaken this kind of job before but has cooked for various prime ministers and high-ranking officials of the Greek government. Botrini will not be here for the entire presidency but will commute between Cyprus and Greece when necessary.

AJET – formerly known as Helios Airways – has asked Greek authorities to re-open an investigation into the deadly air crash of August 14 2005 on the grounds that “new and significant evidence” has come to light.
It has in hand a report compiled by Canadian aviation consultants (a private company) whom they commissioned to examine the debris of the downed plane.
In short, the Canadians’ report attributes the crash of the Boeing 737-300 to an electrical malfunction.
Crucially, its key finding is that the aircraft’s decompression switch had been set to automatic during the flight. The switch had been found on the manual setting when recovered from the debris.
According to the private consultants’ report, what happened is that the decompression switch was moved to the manual position due to the force of the impact.
The report has been sent to Greece’s Air Accident and Incidents Investigative Committee – which carried out a probe into the accident – via the corresponding Cypriot body.
Costas Orfanos, head of the Air Accident and Incident Investigation Board (AAIIB) of Cyprus, yesterday confirmed to the Mail that they have passed on ajet’s material to Greek authorities. It was now up to Greek authorities to decide what to do with it, he said.
To support their finding, the Canadians (and ajet) argue that the light indicators inside the cockpit which signal that the decompression switch is on manual were “cold,” meaning that electrical current did not pass through the indicators’ circuits during the course of the flight. Since the manual decompression indicator was never on, it follows that the decompression switch must have been on auto.
This conclusion roundly contradicts the findings of the Greek investigators who had concluded that the decompression switch had been on manual, that the aviators had omitted to set the switch to automatic prior to takeoff – as per normal procedure for this type of aircraft – and that therefore the crash was due to pilot error.
That contention became the basis for the subsequent criminal trial in Cyprus, where Helios and its officers were accused of negligence for hiring incompetent pilots. Last December, the Nicosia Criminal Court ruled by majority that there was not sufficient evidence linking the Helios defendants to the air crash and as such they bore no responsibility. The state prosecution has appealed the decision.
From the outset Helios has contested – legally and otherwise – the allegation that its pilots were responsible for the crash.
After the August 2005 accident, the airline conducted tests on a similar type of aircraft – a Boeing 737-800 – which showed it was impossible for the plane to take off with the decompression switch set to manual.
The same aircraft had suffered a serious decompression incident months before the fatal crash. On December 16 2004, during a flight from Warsaw, the Boeing experienced a rapid loss of cabin pressure, and the crew made a successful emergency descent. The cabin crew reported to the captain that there had been a bang from the aft service door, and that there was a hand-sized hole in the door's seal. The Air Accident and Incident Investigation Board (AAIIB) of Cyprus could not conclusively determine the causes of the incident, but indicated two possibilities: an electrical malfunction causing the opening of the outflow valve, or the inadvertent opening of the aft service door.
Following the December 2004 incident, the airline had the plane thoroughly inspected (at the cost of some US$1 million) but no malfunctions were detected, according to Christos Neocleous, secretary of ajet. The plane was then cleared to fly again.
Asked why ajet’s was forwarding the private consultants’ report now and not sooner, Neocleous said: “We did not want to use it during the trial lest we be accused of trying to throw a monkey wrench into the proceedings.”
Ajet possessed the Canadians’ report long before the trial ended, he added.

LARNACA District Court yesterday remanded a Romanian couple for eight days, after they were caught trying to leave the country with eight suitcases full of brand-new stolen loot.
The couple – the woman 32 and her boyfriend 38 – who were residing in Polemidia for the past few months, were carrying clothing, jewellery and electric appliances, among other items, the full value of which has not yet been estimated.
“At around 7.30pm on Wednesday night, a couple of European citizens arrived at Larnaca airport to travel to their country,” said Larnaca’s deputy police spokesman Mamas Parpas yesterday. “They presented eight suitcases at the weighing station, which were passed through special machinery that showed one of the cases contained a large number of mobile phones.”
Customs opened the bag and found 20 used mobile phones. “Suspicions were immediately raised and the order was given for all the suitcases to be checked,” said Parpas.
This was when officers found 526 items of women’s clothing, 97 pieces of silver, gold and accessories, six pairs of women’s shoes, an i-Pad, six Sony Playstations and four pairs of designer sunglasses”.
The clothing bore labels from a store that was recently broken into, said Parpas.
“After the objects were found, suspicions were raised that they were stolen and the couple was arrested on the spot,” he added.
Parpas said police thought it was an isolated incident, though the force was looking into the possibility of them being part of a ring.
It was yesterday reported that the couple claimed to have found the goods in markets and rubbish tips.
Larnaca CID is investigating, though the departments of other districts may have to get involved, depending on how investigations progress.

TURKEY said yesterday it had scrambled military jets to intercept an Israeli plane that violated ‘northern Cypriot airspace’ this week, and demanded an explanation for the incursion.
An Israeli military spokesman declined to comment on the accusation. But the incident marked a fresh source of tension between the former allies.
Relations between Turkey and Israel fell apart after Israeli commandos raided the Mavi Marmara aid vessel in May 2010 to enforce a naval blockade of the Gaza Strip and killed nine Turks in clashes with pro-Palestinian activists.
Monday's reported air incursion coincided with tensions on the Mediterranean island of Cyprus over oil and gas exploration plans there, which could hinder UN-backed efforts to reunite the island.
"A plane belonging to Israel, the model of which could not be identified, violated KKTC (Turkish Republic of Northern Cyprus) airspace (above its territorial waters) five times," the Turkish military said in a statement posted on its website.
"In response to this situation, our 2XF-16 plane based at Incirlik was scrambled and our planes carried out patrol flights in KKTC airspace, preventing the said plane from continuing to violate KKTC airspace," said the statement.
Turkey's foreign ministry said it had contacted Israel's mission in Ankara, seeking an explanation for the incursion.
In Jerusalem, an Israeli military spokeswoman said she was checking the report.
The internationally recognised Cypriot government reported an offshore natural gas discovery in December but its attempt to exploit the reserves has been challenged by Turkey.
Israel has separately reported two major energy finds offshore in the sea separating it from Cyprus.
Israel has worked to enhance ties with Cyprus and Greece as its relations with Turkey have frayed.
The eastern Mediterranean has recently seen joint Israeli military manoeuvres with its partners, as well as long-distance training by Israel's air force for a possible strike against Iran's nuclear facilities.
Israel uses warplanes and pilotless drones, as well as naval craft, to patrol its offshore natural gas fields.
Turkey stirred fears of a possible confrontation at sea by saying last year it would boost its naval patrols in the eastern Mediterranean.
But a senior Israeli military officer told Reuters there had been no discernible increase in Turkish naval operations in Israel's economic waters, which extend 187 km from its coast.          

CRACKS IN the minority opposition camp are showing and growing as Wednesday’s meeting between DIKO and ruling AKEL on next year’s presidential elections proved too much for the nascent alliance.
The Greens repeated its call yesterday for all four minority parties - DIKO, EDEK, EVROKO and the Greens – to present a “united front” and hold meetings with other parties together regarding next February’s elections.
The party went so far as to liken the current approach of holding bilateral meetings with AKEL to the “theatre of the absurd”.
According to press reports, DIKO leader Marios Garoyian laid down a precondition in his talks with AKEL leader Andros Kyprianou that any potential candidate had to come from DIKO while the AKEL leader said any collaboration in the elections should preclude a campaign of criticism against President Demetris Christofias’ time in government. 
Following a meeting with Greens’ leader Ioanna Panayiotou yesterday, Garoyian rejected the proposal to hold joint meetings with other parties. He also expressed his “great dissatisfaction” with the Greens for manifesting distrust and suspicion over DIKO’s intentions.
Speaking later on state broadcaster CyBC, Garoyian ruled out the prospect of him running as a presidential candidate.
DIKO spokesman Fotis Fotiou yesterday clarified that DIKO’s meeting with AKEL aimed at establishing the prospect of collaboration with all the minority parties, not just DIKO. 
Panayiotou said yesterday the idea of presenting a united front in negotiations with other parties was not a question of trust but of procedure.
EDEK leader Yiannakis Omirou also revealed some uneasiness with Garoyian’s meeting with Kyprianou on Wednesday, saying there was no question of holding parallel negotiations with other parties while trying to forge an alliance among the minority parties.
He tried to clarify his response yesterday, saying that his aim was to confirm his determination to find agreement among the minority parties on how to approach the 2013 elections.
Meanwhile, a meeting between AKEL and EDEK is planned for Monday.

THE HOUSE yesterday started discussing a bill to allow private armed guards onboard Cypriot-flagged ships seeking protection from pirates lurking in Somali waters as well as West Indian oceans.
The head of the Communications Committee Antonis Antoniou said that piracy had become “a very serious phenomenon” worldwide with pirates requesting “millions of euros as ransom to free hostages”.
Antoniou said that because Cyprus did not allow the hiring of private armed guards, fewer Cypriot-flagged ships were being charted. “We have lost ten ships which have removed the Cypriot flag from their masts and have been deleted from the shipping register”.
“The bill we are examining regulates the issue of the protection of Cypriot ships from illegal actions by enabling the use of private guards,” Antoniou said.
Under the bill’s provisions, ship owners could apply to the Department of Merchant Shipping  to obtain the necessary paperwork.

LAWMAKERS yesterday said that they were worried over Cyprus’ national football team because foreign footballers were getting citizenship.
“We have destroyed our teams' national identity, and all that is left is the national team” opposition DISY MP Andreas Michaelides said. Michaelides who had also tabled the discussion at the Interior Committee said the House should “even consider changing – if necessary - the civil registry law to curtail this phenomenon”.
The head of the Pancyprian Footballers’ Association, Spyros Neofytides, said that 72.3 per cent of footballers in Cypriot teams were EU or third-country nationals.
He added that the state had failed to encourage home-grown talents to create professional footballers.
The coaches’ association Christakis Christoforou said that preventing non-Cypriots from playing in the national team would not solve anything since those who get citizenship stay behind and coach football teams.
The Sports Federation said however that there was no real problem as such.
“This is not worrisome at all, that is to say there are not large numbers of citizenship applications in front of the interior ministry,” said the general manager of the sports federation (KOA) Costas Papacostas.
Papacostas said that KOA held two round-table discussions on the matter and agreed that the “integrity of our national team must be safeguarded”.
The football federation’s (KOP) vice chairman Andreas Santis said that the body did not aim to turn any and every footballer into Cypriots “en masse”.
“Any footballers given Cypriot citizenship until now have fulfilled all criteria and all applications related to the individual right of anyone to apply for a Cypriot citizenship, if and when certain requirements are met,” Santis said.
Michaelides named two footballers who have applied to get Cypriot citizenship so would be eligible to join the national team, and dismissed publications mentioning higher numbers.
He also said that the discussion had nothing to do with those “excellent footballers”. “We are worried about the future of the national team,” he said.