Cyprus Mail: News Articles in English, 99-08-15

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From: The Cyprus Mail at <http://www.cynews.com/>

August 15, 1999

CONTENTS

[01] SEC probe into Louis shares saleBy Anthony O. MillerTHE SECURITIES & Exchange Commission (SEC) is widening its probe of the recent Louis Cruise Line (LCL) share offering, and wants legislation to ban the kind of short- term stock sales some Louis officers profited from, SEC officers have told The Sunday Mail.An SEC investigation is already probing possible collusion and preferential treatment involving some Louis executives and the private placement of 3.3 million of the company's shares out of the 22.6 million offered, the SEC officers said.The Commission also plans to visit Louis' offices this week to see why share certificates and unspent cash have still not been returned to investors, despite July deadlines for both."We're looking into... the Louis IPO (initial public offering) and the delay of the titles" and the unused tender money being sent to shareholders, one SEC officer said.Asked if there are suspicions of preferential treatment and collusion in the private placement, the SEC officer confirmed that an investigation has begun.The controversy over his first-day purchase and sale of 80,000 LCL shares has grown so painful, Louis Managing Director Stelios Kiliaris told The Sunday Mail, that "if I had to go through the whole thing again, I would not buy any shares".Kiliaris' first-day LCL stock trading was blamed by brokers and investors for causing the share price to plunge from a �3.50 opening day (Aug. 3) high, to a second-day close of �2.75 -- after the Exchange announced, as required, that a top Louis executive had dumped 80,000 Louis shares on Day One.The share price fell further, to an Aug. 5 close of �2.12, rising slightly to a �2.29 close on Aug. 6, when the Exchange shut for a week in an effort to dig out from under a paperwork avalanche.The market said Kiliaris' sale of so many shares the day they opened bespoke a lack of confidence in LCL's future, intensifying second- and third-day profit-taking.Kiliaris said he had done nothing illegal or improper. "I don't think it depressed the price," he said. "I think the price fell in the second day before anyone knew about the fact that I sold."Besides, he said, few punters were really hurt, since the shares opened at 40 cents each on August 3 and closed five times higher, at �2.29, on August 6 -- despite nose-diving from the first-day high of �3.50."Everyone is selling shares and there is no problem," Killaris said, "because it is something done by all the directors and chairman of all companies." Besides, he said, selling early "avoided insider trading" since a later sale might exploit privileged information, letting him profit before others could.Despite keen interest in their stock transactions, the Cyprus Stock Exchange (CSE) and the SEC both agreed that neither Kiliaris nor LCL Secretary Spyros Spyrides broke any Cyprus laws or Exchange rules when they, respectively, sold 80,000 and 62,000 Louis shares on the first day they traded.The CSE and SEC officers exonerated Kiliaris and Spyrides of insider-trading. But none cared to comment on what appeared to some accountants, lawyers and other professionals polled by The Sunday Mailto have been dubious professional ethics in connection with the stock dealings.Specifically, these other experts acknowledged Kiliaris' and Syprides' short-term sales may indeed have hurt investor confidence, triggering the Louis share price plunge.But they said they knew of no Cyprus or English Common Law that would label what either man did as a breach of fiduciary obligation -- their duty in trust as corporate officers to forego personal profit and maximise investors' returns."We are preparing regulations," another SEC officer said. "One of them is the code of conduct of directors or employees. It says a director, employee or anyone with privileged information should not trade on a short-term basis -- buy today and sell two days later.""If we had the regulations now, and Mr Kiliaris did what he did, that would be a problem for him. But it was not illegal what Mr Kiliaris did" under current law, the SEC officer said.After vetting by the Attorney-general, "these regulations are going to be set before the House of Representatives for a vote after the holidays," the same SEC officer said."I cannot give you an answer," the SEC official replied, when asked why the Stock Exchange had no such regulation in force the day it first opened for trading.Informed of the SEC's planned action, Kiliaris declared: "OK. If they make it illegal, they make it illegal. It was not illegal when I did it."In expanding its Louis IPO probe, the second SEC official said one avenue of pursuit was "some complaints" on file from LCL investors who have not yet received their share certificates or their unused tender cash back.The Louis prospectus set deadlines of July 15 for tender subscription offers, July 26 for Louis to return any unspent tender cash, and July 27 for Louis to send back all stock titles, a CSE official explained. Under Exchange rules, Louis must meet these deadlines, the official said.The issue was expected to be popular, but "nobody expected 22, 000 investors," Lefteris Papaeracleous, manager at the issue's underwriter, Laiki Investments Ltd, said.The IPO stunned the market, drawing �508 million in tenders and being oversubscribed 53-fold. This meant sending 44, 000 envelopes, half for the stock titles, half to return tender cash, "and there were a few (address) mistakes," Papaeracleous said.But "nobody is making money because of the delay," he insisted, scotching rumours that Louis deliberately held on to the cash so the company could earn interest on it."Louis had the money from the seven working days that started on July 15, but it was mailed back on July 26," he said. "So, yes, for a very few days, Louis was making interest on that money... (but) the investor is not losing any money."If Louis held the money beyond July 26, they were supposed to pay interest of seven per cent, the Exchange official said. "If the company sent the cheques before the (July 26) deadline, they are not obligated to pay anything. They are not obligated to pay any interest if there is a postal problem."Louis "assured us in writing that it sent all the money and all the titles back" on time, the Exchange official said.Deputy Attorney-general Nicos Charalambous said his office is not now investigating the Louis IPO. But on Friday, citing unidentified sources, Alithia newspaper said Attorney-general Alecos Markides, will discuss the possibility of such a probe with Charalambous when he returns to Cyprus.

[02] Archbishop �has a change of heart�By Charlie CharalambousARCHBISHOP Chrysostomos has had a change of heart over his controversial Louis share handouts, and now wants everyone in the church to get a slice.The primate is embroiled in an unholy row concerning the lucrative Louis Cruise Line shares after he reportedly sold the Church's quota to select friends.Since the backlash within the confines of the Archbishopric, Chrysostomos has had second thoughts and now wants to distribute the profits rather more equally, Simerinireported yesterday.He wants the friends, the so-called G-8, to give back their shares in order to spread the wealth around with those left on the sidelines.But this seems unlikely because the G-8 would lose tens of thousands of pounds overnight.The affair has done little to improve the church's tarnished image or to prevent bitter in-fighting among those jockeying for power within the Holy Synod.Unsurprisingly, Bishop Chrysostomos of Paphos has deemed the Louis free-for-all a "scandal" and said the Archbishop was "wrong" to encourage such profiteering.Louis is said to have "accommodated" the Archbishop with his demand for nearly 200, 000 shares in the private placement scheme.The Archbishop acquired 187,500 private placement shares at 40 cents each and then divided them among his chosen few at a bargain 50 cents each.This was before the much vaunted LCL flotation on the stock exchange where the price hit �3.50 on the opening day of business on August 3 -- ensuring his friends a much larger potential windfall.Although Holy Synod members, clerics and staff at the archbishopric expressed outrage over Archbishop Chrysostomos' suspect dealings, insiders put it down to sour grapes at losing out rather than taking the moral high ground.Louis Cruise Lines vehemently denies any wrongdoing in the way it managed the 22.6 million shares private placement offer.

[03] Spies �were monitoring secret delivery of tanks�By Charlie CharalambousTWO JAILED Israeli agents freed "in the national interest" by President Clerides this week were reportedly spying on a secret delivery of Greek Army American-made M48 5A battle tanks when they were arrested last year.Quoting Cyprus Intelligence Service sources, yesterday's Simerininewspaper claimed the security forces were convinced the two bungling agents were working on behalf of Turkish intelligence.Udi Hargov, 37, and Igal Damary, 49 -- jailed for approaching a military area -- were whisked off the island in a private jet immediately after their shock release on Thursday.They had served only six months of a three-year prison sentence handed down on February 1 for encroaching on a restricted military area during covert army operations in Zygi, Larnaca, last November 6.At the time of their arrest a secret shipment of US M48 battle tanks -- sent to bolster the Greek army's presence on the island -- was being unloaded, Simerinisaid.Security sources are reported as saying such activity was against the "national interest" and put the Cyprus Republic at "great risk". Opposition parties reacted angrily to the agents� early release, and the newspaper report only reflects overriding public opinion.During the spy case inquiry, Cypriot intelligence officers wanted Hargov and Damary to be charged as "Mossad agents acting on behalf of Turkey against Cyprus". Conviction on this charge would have carried a 10-year jail term.But because of political pressure brought to bear on the government by Israel, the complete case file was not presented to the Attorney-general's office.The Simerinireport suggested the evidence had been deliberately spiked in order to defuse the hostile climate.In court the charge of espionage was watered down and then sensationally dropped during a round of plea bargaining which saw the two plead guilty to the less serious charge of encroachment."The M48 5A is the most recent modification of this model and had several readjustments for the Greek contingent. They were sent back recently," military pundit Aristos Aristotelous told The Sunday Mail yesterday.The Greek contingent's M48 5A main battle tanks were removed from the island six weeks ago following a decision by Nicosia and Athens to comply with US law stating that any American weapons made after 1987 could not be deployed on Cyprus.The Israelis� release this week sparked a storm of protest from opposition parties which condemned the move as a "national humiliation" and a "surrender of the island's sovereignty".Clerides said he agreed to free the two agents in order to improve tarnished bilateral relations -- instigated by their arrest last year -- now that a new Israeli government was in place.

[04] Limassol braces itself for Israeli invasionBy Charlie CharalambousALTHOUGH two Israelis flew out of Cyprus pretty sharpish this week, freed early after being jailed on spying charges, the island is now bracing itself for an invasion of 12,000 of their countrymen.A huge wave of Israeli soccer supporters is expected in Limassol next month to watch a crucial European championship qualifying round between Cyprus and Israel at the Tsirion Stadium on Sunday September 5.Demand for hotel rooms has reached fever pitch, as have the hopes of those Israelis making the short trip across the Mediterranean to see Israel take one more step towards qualification.However, Limassol -- like all coastal resorts -- is in the middle of a record- breaking summer season, which means there will be little available room to accommodate those soccer fans wanting to stay over for the weekend.Limassol hoteliers say it's "impossible" to put up so many fans in one go as most hotels are already full to the brim.Contingency plans are now being made to absorb the Israeli armada by arranging for the fans to stay in hotels in Larnaca and Nicosia.

[05] A daughter named EclipseBy Athena KarseraWHILE some people predicted Wednesday's solar eclipse would herald the end of time, a new-born baby girl in Paphos proved that life was just beginning.The Hapeshis family had their second little girl at 2pm, just as the eclipse ended, and now they have decided to call their baby after the phenomenon in honour of the time she was born.Speaking to The Sunday Mail, Savvas, the proud father of little Eklipsi (Eclipse) said: "I couldn't think of a more suitable name."Hapeshis, manager of the Jolly Roger pub, said that his wife Michaela and Eclipse were both doing well and had returned home on Friday afternoon.Eclipse's grandmother Andriana said yesterday that the baby had been expected on that day or the next: "When the pains started we knew the time had come."She said that the baby's birth had "eclipsed the real eclipse" and that the happy event had been made even more joyous by its unusual circumstances.The couple's older daughter has the more conventional name of Andriana, after her grandmother, and is three and a half years old.

[06] Athlete dies after early morning swim

[07] A pilgrims protest

[08] Bomb blast in Limassol

[01] SEC probe into Louis shares saleBy Anthony O. MillerTHE SECURITIES & Exchange Commission (SEC) is widening its probe of the recent Louis Cruise Line (LCL) share offering, and wants legislation to ban the kind of short- term stock sales some Louis officers profited from, SEC officers have told The Sunday Mail.An SEC investigation is already probing possible collusion and preferential treatment involving some Louis executives and the private placement of 3.3 million of the company's shares out of the 22.6 million offered, the SEC officers said.The Commission also plans to visit Louis' offices this week to see why share certificates and unspent cash have still not been returned to investors, despite July deadlines for both."We're looking into... the Louis IPO (initial public offering) and the delay of the titles" and the unused tender money being sent to shareholders, one SEC officer said.Asked if there are suspicions of preferential treatment and collusion in the private placement, the SEC officer confirmed that an investigation has begun.The controversy over his first-day purchase and sale of 80,000 LCL shares has grown so painful, Louis Managing Director Stelios Kiliaris told The Sunday Mail, that "if I had to go through the whole thing again, I would not buy any shares".Kiliaris' first-day LCL stock trading was blamed by brokers and investors for causing the share price to plunge from a �3.50 opening day (Aug. 3) high, to a second-day close of �2.75 -- after the Exchange announced, as required, that a top Louis executive had dumped 80,000 Louis shares on Day One.The share price fell further, to an Aug. 5 close of �2.12, rising slightly to a �2.29 close on Aug. 6, when the Exchange shut for a week in an effort to dig out from under a paperwork avalanche.The market said Kiliaris' sale of so many shares the day they opened bespoke a lack of confidence in LCL's future, intensifying second- and third-day profit-taking.Kiliaris said he had done nothing illegal or improper. "I don't think it depressed the price," he said. "I think the price fell in the second day before anyone knew about the fact that I sold."Besides, he said, few punters were really hurt, since the shares opened at 40 cents each on August 3 and closed five times higher, at �2.29, on August 6 -- despite nose-diving from the first-day high of �3.50."Everyone is selling shares and there is no problem," Killaris said, "because it is something done by all the directors and chairman of all companies." Besides, he said, selling early "avoided insider trading" since a later sale might exploit privileged information, letting him profit before others could.Despite keen interest in their stock transactions, the Cyprus Stock Exchange (CSE) and the SEC both agreed that neither Kiliaris nor LCL Secretary Spyros Spyrides broke any Cyprus laws or Exchange rules when they, respectively, sold 80,000 and 62,000 Louis shares on the first day they traded.The CSE and SEC officers exonerated Kiliaris and Spyrides of insider-trading. But none cared to comment on what appeared to some accountants, lawyers and other professionals polled by The Sunday Mailto have been dubious professional ethics in connection with the stock dealings.Specifically, these other experts acknowledged Kiliaris' and Syprides' short-term sales may indeed have hurt investor confidence, triggering the Louis share price plunge.But they said they knew of no Cyprus or English Common Law that would label what either man did as a breach of fiduciary obligation -- their duty in trust as corporate officers to forego personal profit and maximise investors' returns."We are preparing regulations," another SEC officer said. "One of them is the code of conduct of directors or employees. It says a director, employee or anyone with privileged information should not trade on a short-term basis -- buy today and sell two days later.""If we had the regulations now, and Mr Kiliaris did what he did, that would be a problem for him. But it was not illegal what Mr Kiliaris did" under current law, the SEC officer said.After vetting by the Attorney-general, "these regulations are going to be set before the House of Representatives for a vote after the holidays," the same SEC officer said."I cannot give you an answer," the SEC official replied, when asked why the Stock Exchange had no such regulation in force the day it first opened for trading.Informed of the SEC's planned action, Kiliaris declared: "OK. If they make it illegal, they make it illegal. It was not illegal when I did it."In expanding its Louis IPO probe, the second SEC official said one avenue of pursuit was "some complaints" on file from LCL investors who have not yet received their share certificates or their unused tender cash back.The Louis prospectus set deadlines of July 15 for tender subscription offers, July 26 for Louis to return any unspent tender cash, and July 27 for Louis to send back all stock titles, a CSE official explained. Under Exchange rules, Louis must meet these deadlines, the official said.The issue was expected to be popular, but "nobody expected 22,000 investors," Lefteris Papaeracleous, manager at the issue's underwriter, Laiki Investments Ltd, said.The IPO stunned the market, drawing �508 million in tenders and being oversubscribed 53-fold. This meant sending 44,000 envelopes, half for the stock titles, half to return tender cash, "and there were a few (address) mistakes," Papaeracleous said.But "nobody is making money because of the delay," he insisted, scotching rumours that Louis deliberately held on to the cash so the company could earn interest on it."Louis had the money from the seven working days that started on July 15, but it was mailed back on July 26," he said. "So, yes, for a very few days, Louis was making interest on that money... (but) the investor is not losing any money."If Louis held the money beyond July 26, they were supposed to pay interest of seven per cent, the Exchange official said. "If the company sent the cheques before the (July 26) deadline, they are not obligated to pay anything. They are not obligated to pay any interest if there is a postal problem."Louis "assured us in writing that it sent all the money and all the titles back" on time, the Exchange official said.Deputy Attorney-general Nicos Charalambous said his office is not now investigating the Louis IPO. But on Friday, citing unidentified sources, Alithia newspaper said Attorney-general Alecos Markides, will discuss the possibility of such a probe with Charalambous when he returns to Cyprus.

August 15, 1999

[02] Archbishop �has a change of heart�By Charlie CharalambousARCHBISHOP Chrysostomos has had a change of heart over his controversial Louis share handouts, and now wants everyone in the church to get a slice.The primate is embroiled in an unholy row concerning the lucrative Louis Cruise Line shares after he reportedly sold the Church's quota to select friends.Since the backlash within the confines of the Archbishopric, Chrysostomos has had second thoughts and now wants to distribute the profits rather more equally, Simerinireported yesterday.He wants the friends, the so-called G-8, to give back their shares in order to spread the wealth around with those left on the sidelines.But this seems unlikely because the G-8 would lose tens of thousands of pounds overnight.The affair has done little to improve the church's tarnished image or to prevent bitter in-fighting among those jockeying for power within the Holy Synod.Unsurprisingly, Bishop Chrysostomos of Paphos has deemed the Louis free-for-all a "scandal" and said the Archbishop was "wrong" to encourage such profiteering.Louis is said to have "accommodated" the Archbishop with his demand for nearly 200,000 shares in the private placement scheme.The Archbishop acquired 187,500 private placement shares at 40 cents each and then divided them among his chosen few at a bargain 50 cents each.This was before the much vaunted LCL flotation on the stock exchange where the price hit �3.50 on the opening day of business on August 3 -- ensuring his friends a much larger potential windfall.Although Holy Synod members, clerics and staff at the archbishopric expressed outrage over Archbishop Chrysostomos' suspect dealings, insiders put it down to sour grapes at losing out rather than taking the moral high ground.Louis Cruise Lines vehemently denies any wrongdoing in the way it managed the 22.6 million shares private placement offer.

August 15, 1999

[03] Spies �were monitoring secret delivery of tanks�By Charlie CharalambousTWO JAILED Israeli agents freed "in the national interest" by President Clerides this week were reportedly spying on a secret delivery of Greek Army American-made M48 5A battle tanks when they were arrested last year.Quoting Cyprus Intelligence Service sources, yesterday's Simerininewspaper claimed the security forces were convinced the two bungling agents were working on behalf of Turkish intelligence.Udi Hargov, 37, and Igal Damary, 49 -- jailed for approaching a military area -- were whisked off the island in a private jet immediately after their shock release on Thursday.They had served only six months of a three-year prison sentence handed down on February 1 for encroaching on a restricted military area during covert army operations in Zygi, Larnaca, last November 6.At the time of their arrest a secret shipment of US M48 battle tanks -- sent to bolster the Greek army's presence on the island -- was being unloaded, Simerinisaid.Security sources are reported as saying such activity was against the "national interest" and put the Cyprus Republic at "great risk". Opposition parties reacted angrily to the agents� early release, and the newspaper report only reflects overriding public opinion.During the spy case inquiry, Cypriot intelligence officers wanted Hargov and Damary to be charged as "Mossad agents acting on behalf of Turkey against Cyprus". Conviction on this charge would have carried a 10-year jail term.But because of political pressure brought to bear on the government by Israel, the complete case file was not presented to the Attorney-general's office.The Simerinireport suggested the evidence had been deliberately spiked in order to defuse the hostile climate.In court the charge of espionage was watered down and then sensationally dropped during a round of plea bargaining which saw the two plead guilty to the less serious charge of encroachment."The M48 5A is the most recent modification of this model and had several readjustments for the Greek contingent. They were sent back recently," military pundit Aristos Aristotelous told The Sunday Mail yesterday.The Greek contingent's M48 5A main battle tanks were removed from the island six weeks ago following a decision by Nicosia and Athens to comply with US law stating that any American weapons made after 1987 could not be deployed on Cyprus.The Israelis� release this week sparked a storm of protest from opposition parties which condemned the move as a "national humiliation" and a "surrender of the island's sovereignty".Clerides said he agreed to free the two agents in order to improve tarnished bilateral relations -- instigated by their arrest last year -- now that a new Israeli government was in place.

August 15, 1999

[04] Limassol braces itself for Israeli invasionBy Charlie CharalambousALTHOUGH two Israelis flew out of Cyprus pretty sharpish this week, freed early after being jailed on spying charges, the island is now bracing itself for an invasion of 12,000 of their countrymen.A huge wave of Israeli soccer supporters is expected in Limassol next month to watch a crucial European championship qualifying round between Cyprus and Israel at the Tsirion Stadium on Sunday September 5.Demand for hotel rooms has reached fever pitch, as have the hopes of those Israelis making the short trip across the Mediterranean to see Israel take one more step towards qualification.However, Limassol -- like all coastal resorts -- is in the middle of a record- breaking summer season, which means there will be little available room to accommodate those soccer fans wanting to stay over for the weekend.Limassol hoteliers say it's "impossible" to put up so many fans in one go as most hotels are already full to the brim.Contingency plans are now being made to absorb the Israeli armada by arranging for the fans to stay in hotels in Larnaca and Nicosia.

August 15, 1999

[05] A daughter named EclipseBy Athena KarseraWHILE some people predicted Wednesday's solar eclipse would herald the end of time, a new-born baby girl in Paphos proved that life was just beginning.The Hapeshis family had their second little girl at 2pm, just as the eclipse ended, and now they have decided to call their baby after the phenomenon in honour of the time she was born.Speaking to The Sunday Mail, Savvas, the proud father of little Eklipsi (Eclipse) said: "I couldn't think of a more suitable name."Hapeshis, manager of the Jolly Roger pub, said that his wife Michaela and Eclipse were both doing well and had returned home on Friday afternoon.Eclipse's grandmother Andriana said yesterday that the baby had been expected on that day or the next: "When the pains started we knew the time had come."She said that the baby's birth had "eclipsed the real eclipse" and that the happy event had been made even more joyous by its unusual circumstances.The couple's older daughter has the more conventional name of Andriana, after her grandmother, and is three and a half years old.

August 15, 1999

[06] Athlete dies after early morning swim

Omonia handballer Georgos Andreas Loizides, 20, from Strovolos, was at a Protoras pub with nine other friends when the group decided to go for a swim at Vrissi beach, Paralimni, at approximately 4.45am.

When they been in the water for some time they realised that Loizides was missing, and his friends spent 30 minutes trying to locate him in the darkness.

They found the victim floating unconscious and gave him first aid, but without success.

Police were called and an ambulance took Loizides to Paralimni hospital where he was pronounced dead on arrival.

Doctors have ruled out foul-play in Loizides� death, saying there were no external injuries on his body. His death is thought to have been caused by drowning.

Loizides' mother rushed to the hospital to be told of her son's tragic death. His father Andreas, Omonia's physiotherapist, was on his way back to Cyprus yesterday from a trip overseas.

Police are continuing investigations into the exact circumstances of Loizides� death.

August 15, 1999

[07] A pilgrims protest

The Kyrenia Refugee's Association yesterday expressed "sadness at the government and parties... organising and encouraging these humiliating visits".

It urged the government to call off the pilgrimage, "even at the eleventh hour".

Today's is the 12th pilgrimage organised with the co-operation of Unficyp which will accompany the convoy of at least ten buses.

The pilgrims will not pay the illegal �visa� fee, which the Turkish regime usually imposes on visitors to the occupied areas, but they will pay a nominal transport fee.

Turkish Cypriots on pilgrimages to the free areas also pay this transport fee.

The trip starts early this morning, and the pilgrims are expected to return before dusk.

August 15, 1999

[08] Bomb blast in Limassol

Police said the car had recently been driven by cabaret owner Melios Athanasiou, 40, although it belonged to another Limassol resident.

The bomb went off at approximately 1am when the vehicle was parked outside Athanasiou's apartment.

No one was injured in the blast.

© Copyright Cyprus Mail 1999

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