Audit boss says state deal with Altamira a “major scandal”

In 2017, the now-defunct cooperative bank – run by the state at the time – signed a non-competitive contract with asset management company Altamira, through which the latter would manage the $ 7 billion portfolio. The lender’s NPLs, while the deal was likely drafted by Altamira herself, lawmakers heard on Thursday.

Speaking to the House Oversight Committee, Auditor General Odysseas Michaelides said the contract was drafted by Altamira’s lawyers.

“This is a major scandal … an agreement involving the state drawn up by a private entity rather than the state,” he said.

MEPs were reviewing the details of how the cooperative had struck a deal with Spain’s Altamira in the first place, and also what that deal entailed.

An official from the Ministry of Finance said they were in communication with the Attorney General’s office on this matter and that to date, 24 complaints have been lodged with the police regarding the potential commission of criminal offenses related to the issue. the cooperative case-Altamira.

Nicos Papaesftathiou, attorney at the law firm Tassos Papadopoulos & Associates, said their only connection to the Altamira case was when they were asked to provide legal advice on whether the cooperative is an organization of public Law.

The law firm considered that the cooperative was not legally a body governed by public law, and that by extension it was not obliged to comply with the law on public procurement – which requires to launch calls for tenders for contracts worth more than a certain amount.

It turned out that the cooperative never launched a tender, negotiating only with Altamira, which won the contract.

According to Papaefstathiou, the cooperative was nonetheless a state enterprise – and as such, it had to implement the general principles of administrative law and public competitions in general.

“We have never been Altamira’s lawyers,” he told MPs.

Altamira’s lawyers in Cyprus were in fact Koushos, Korfiotis and Papacharalambous LLC – in which current government spokesman Kyriacos Koushos was a partner.

And the same law firm registered Altamira Cyprus with the Registrar of Companies.

Altamira Cyprus was an offshoot of the Spanish parent company.

Coming back to the contract without a call for tenders, the Auditor General said that in November 2017, the cooperative and Altamira (Spain) signed the first agreement; and subsequently, on January 23, 2018, an updated agreement was signed between the cooperative and Altamira Cyprus.

The cooperative sent this document to Altamira, and it landed on the desk of Varnavas Kourounas – at the time a senior executive of the asset management company.

In another twist, Kourounas had previously held the position of division head of the cooperative in charge of managing bad debts.

“M. Kournounas, who was judge, juror and executioner with [former cooperative general manager] Nicolas Hadjiyiannis, in the preparation of this agreement, acted one day on behalf of the cooperative, to change hats the next day and end up with Altamira, ”said Michaelides.

Souzana Poyiadzi, a former senior executive of the cooperative, recounted how an official of the EU’s Single Supervisory Mechanism once told her in dismay that it was the first time “they had heard of a portfolio of 7 billion euros going to a company without bidding ”.

Regarding the lucrative deal itself, the auditor said Altamira receives a fixed amount of 20.4 million euros in administration fees per year, plus a 4% commission on the sale of properties – as well as other commissions.

Nationalized in 2013, five years later, the cooperative agreed to sell its business to Hellenic Bank after its inability to reduce its stock of non-productive assets virtually forced it to close.

The cooperative was sold for pennies on the dollar.

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Jamie Collins

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