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20 April, 2024
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Restoring a wounded reputation

Unmasking the consequences of controversial business practices

Marina Economides

Marina Economides

Last March, a publication by the Financial Times revealed the move of three shareholders of PWC Cyprus to resign from the audit firm and establish the company Kiteserve. The reason behind their departure was the company's policy to completely rid itself of any suspicion of Russian influence due to the Russian invasion and the imposition of sanctions. However, the new company being created would retain clients associated with Russia. As explained by one of the founders in the publication, among other services, it would provide assistance to entities affected by EU sanctions when permitted under an exemption.

The publication sufficiently intensified suspicions regarding whether this new company is a Trojan horse of one of the Big Four. In this context, inspections were reinforced, with the Center scrutinizing PWC Cyprus as late as March. However, the comprehensive audit did not reveal any irregularities on the part of the company. Therefore, all this commotion was necessary, or as the recent insinuation by Christos Clerides, the President of the Bar Association, suggested, it was a hypocritical policy, as "the billions of Russian oligarchs are not swallowed by Cyprus but by countries like England and Germany."

...the recent insinuation by Christos Clerides suggested, it was a hypocritical policy, as "the billions of Russian oligarchs are not 'swallowed' by Cyprus but by countries like England and Germany."

The reference to who benefits from the billions of Russians was inevitably a harsh déjà vu for those who witnessed the tumultuous Cyprus Investment Program. Back then, providers of such services claimed to be offended, targeted and warned about the economic implications this would have for our economy. And the State succumbed. Whether it felt powerless against their influence or, according to skeptics, because part of the political system benefited from it. Unforgettable was the statement made by Nicos Anastasiades from the podium of the European Parliament, saying, "It is not in my country that oligarchs of third countries own football clubs, nor is it in my country that large squares and buildings belong to oligarchs." Faced with the blackmail of the providers, the government relaxed instead of strengthening the criteria for the Cyprus Investment Program. During the same period when the name of the wanted Jho Low appeared among the many who acquired Cypriot citizenship, the government decided to facilitate the naturalization of individuals with criminal records by amending earlier decisions. Unfortunately, it was approved by the very same Parliament.

Indeed, the measures were taken only after we became an international laughingstock with the revelations made by Al Jazeera. The measures were taken after our country's name and reputation were severely affected.

The recent case of the sanctions list imposed by the United States and the United Kingdom was sufficient to send a message that the mentality of opportunism is deeply ingrained in our DNA. I don't know who was surprised by the inclusion of the well-known lawyer Chrysis Vassiliades and others. Nor do I know how many people were mobilized when they learned that Dimitris Ioannides, the owner of Meritservus company, was once part of Deloitte and, according to reports from The Guardian, OCCRP, and Documento, had secretly collaborated with the Cypriot shell company of Malofeev for about three more years before they terminated their partnership.

I know, however, that not all service providers are the same. There are those who respect their profession, work hard, and operate within the bounds of the law. They should have been the first ones to demand strict measures and compliance from those who exploit their homeland for personal enrichment. If they didn't do it to safeguard the reputation of their country, which has been tarnished in recent years by their colleagues, they should have done it to preserve their own profession. Instead of arrogantly wagging their finger, speaking of "excessive compliance" and "a tendency to be more royalist than the king," they should have warned that we will be the ones to suffer the consequences. In essence, they are covering for them.

The government must take measures to prevent collateral losses, but at the same time, it must also take strong and decisive actions. If it is concerned about the healthy economic development of the country, it should understand that the country's bad reputation drives away young, clean investors and hinders long-term economic growth. An economy cannot be saved by the opportunistic actions of certain professionals who have the audacity to shout while they themselves have profited at the expense of their own country.

[This article was translated from its Greek original and was first published in Kathimerini's printed Sunday edition]

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