Auditor General's letter to the Ministry of Finance in view of a new agreement with OPAP

A letter to the Minister of Finance Makis Keraynos stated that the Auditor General Odysseas Michaelidis will send, in which it will be pointed out that any inclusion in a new agreement with OPAP, of an undocumented amount apparently constitutes illegal state aid

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A letter to the Minister of Finance Makis Keraynos stated that the Auditor General Odysseas Michaelidis will send, in which it will be pointed out that any inclusion in a new agreement with OPAP, of an undocumented amount apparently constitutes illegal state aid.

The letter will be sent ahead of ongoing discussions between the Treasury and OPAP, an agreement which Treasury officials told the Parliamentary Audit Committee is at an advanced stage. However, committee members strongly criticized the delay in concluding the new agreement, for which relevant legislation had been introduced in 2018, resulting in the state losing revenue.

The chairman of the committee, Zacharias Koulias, gave a month and a half time credit to the Ministry of Finance in order to receive a new update on the progress of the conclusion of the new agreement. "The issue of OPAP must be clarified once and for all and we will give a reasonable time of one and a half months to see what the Ministry of Finance does," he said, adding that "we must prevent a new agreement of heterobaria from being signed for the state ».

During the session, a confrontation took place between Mr. Koulias and DISY Member of Parliament Savias Orfanidou.

"We have known since 2015 that the agreement is unfair, we spent three years making another law. It's been five years and they haven't implemented it," said Mr. Michaelidis, in the discussion on the examination of the findings of the Audit Service for the Ministry of Finance in the context of the Auditor General's annual report for 2020.

Mr. Michailidis focused particularly on the issue of the licensing fee, saying that if an open tender were held, the state would have increased revenues. "With our scenarios, if the fee was 5%, it means that we will collect together with tax about €38 million when today we collect about €15 million," he said.

He mentioned that OPAP Cyprus, a subsidiary of OPAP Greece, gives 10% of the revenues to the parent company, which amounts to approximately €25 million, adding that there is not the slightest documentation why these amounts should be given to OPAP Greece.

Kyriakos Kakouris, Director of the Directorate of Strategy and Coordination of the Ministry of Finance, said that the Ministry started the procedures in 2018 immediately after the legislation was passed. He noted, however, that the delay in the process is fully justified, recalling that the Ministry of Finance has assigned an external consultant to the due diligence review, while the discussions are technical and detailed.

Besides, Lousi Irodotou Mouscous, Director of the Central Government Financial Management Directorate of the Ministry of Finance, said that it took a year to carry out the due diligence audit, while then the National Betting Authority negotiated with OPAP the issue of the gaming codes, explaining that there are different codes that took more than 130 pages. He noted that the contract has been completed, it was submitted in April 2022 to the Council of Ministers and after its approval it was submitted to the Directorate General for Competition of the European Commission for control on the basis of the state aid framework. He added that some changes are now being made on the basis of DG Comp's remarks in the text of the agreement, which at a later stage will be resubmitted to the Ministry.

AKEL Member of Parliament Irini Charalambidou said that where there is a lot of money there is also a big acquisition at all levels. "The OPAP case as it has been presented for the last five to six years leads to the conclusion of a large acquisition either in the form of donations or sponsorships. The issue of OPAP must be clarified in the well-meaning interests of the Republic", he added.

And the Member of Parliament Christos Christofidis said that the time period for concluding the new agreement is so long that it cannot be justified by any procedural issues.

Confrontation between Koulias and Orfanidou

At the session, Savia Orfanidou mentioned that OPAP should also be invited to the session as the other part of the discussion, with Mr. Koulias wondering who he represents.

Reacting, Mrs. Orfanidou asked Mr. Koulias to retract that he let it be understood that he supports OPAP. "I represent DISY and not OPAP. Delete everything because you are infringing on my personal prestige," he said with Mr. Koulias replying that he dutifully supports the Auditor General.

In another of her interventions, she noted that the debate on this issue is uneven, since half an hour was given to the Auditor General to speak for half an hour without giving a similar time to the Ministry of Finance and the General Accounting Office to respond.

"I want to report that the President of the Commission has bullied me in a very unethical way, saying that I represent certain interests. I consider it tragic and unacceptable and these are the reasons why people are averse to politics," he added.

In response, Mr. Koulias, addressing Ms. Orfanidou, told her to "go out and talk about it". He further noted that the Commission's job is to monitor the issues and the money line, with the Auditor General as the most important partner. "And he doesn't want lawyers or accusers, even though he has bad accusers. I will repeat here for a number of years a legislation that was enacted in 2018, has not been implemented despite the fact that there was an opinion of the Attorney General saying that it was unfair. Those who did not implement it for five years should not teach us a lesson", he added.

Rental of warehouses in the state

At the same time, Mr. Michaelidis referred to the issue of renting warehouses to the state in Limassol, recalling that the state plot was initially rented at a subsidized price to the private sector to encourage industrial activity. He noted, however, that the private person erected warehouses on the plot and then sublet it to the state as warehouses at 20 times the rent.

In response, Mr. Kakouris said that the contract has been terminated and another warehouse has been found.

An issue was also raised about the decision of the Council of Ministers to second Theodosis Tsiolas, Director General of the General Directorate of Development as an assistant to the Cypriot Representative at the European Court of Auditors.

"The Republic cannot grant licenses to any Director General. He is the supreme administrative head of a Ministry, his position is extremely important, the position cannot be given leave on the pretext that he will gain experience. If he wanted to go he had to resign. Posting is allowed by law, but the state should not have allowed it,” he said.

Source: KYPE