THE Electricity Authority of Cyprus (EAC) is simmering with unrest after a controversial deal cut between the top brass and a high-profile stockbroker on the repayment of millions of pounds gone missing from employees’ pension fund.
Back in 2005, CEO of Suphire Securities & Financial Services Ltd Yiannos Andronikou was suspected of embezzling close to £8 million from the EAC pension fund. The affair came to light after the EAC had discovered a discrepancy in the fund on the last day of 2004 during an internal audit that found that official stock market figures on the fund’s portfolio for the year did not correspond to those provided by Suphire.
Andronikou had invested the vast amounts from the pension fund in shares on the stock market.
Both Andronikou and his wife Rea have been in court facing charges of theft, falsifying accounts and concealment.
But this week the EAC and Andronikou reached a tentative agreement on an out-of-court settlement.
Under the deal, Andronikou, who has already paid back around £3 million straight into the pension fund, will pay the rest by selling to the EAC some 3 million shares he holds in a public company.
The EAC’s board of directors says it has received assurances that any trading in these shares is suspended pending the execution of the settlement; but some quarters inside the organisation are not so sure, fearing they might be saddled with dud shares.
Meanwhile the EAC’s unions are up in arms over the agreement. Already a leading member of the pension fund management committee has resigned in protest.
The organisation’s four main unions yesterday released a joint statement, where they lambasted the bosses for cutting the deal with Andronikou and demanded they reconsider their move. The employees have also warned of possible strike action.
It is said the board of directors needed to make a choice: either pursue the battle in court and risk losing all or most of the money owed, or reach a settlement that guarantees payment of at least part of the sum.
Reportedly, there is also concern that Andronikou might change his mind and withdraw the offer.
But yesterday the stockbroker pulled another rabbit out of the hat, asking the court to declare the EAC’s lawsuit null and void.
Andronikou’s lawyers argue that the pension fund was set up according to internal EAC regulations and not by law, therefore disputes over the fund cannot entail litigation.
The court reserved judgment on this for next week.
Meanwhile Government Spokesman Christodoulos Pashiardis was yesterday taken to task over rumours that, behind the scenes, the administration was pulling its weight with the EAC leadership to go for the deal and not buckle under pressure from disgruntled employees.
Pashiardis denied this, saying the government did not intervene in the day-to-day affairs of semi-governmental organisations.
The boards of directors of SGOs are appointed by the government.
“The government can only issue [semi-governmental organisations] policy guidelines. The rest is the business of the organisation’s board of directors and officers,” Pashiardis noted.