Loan related blast highlights bad contract enforcement record (Update-2)


(Adds background in seventh paragraph)

By Stelios Orphanides

The director of CRI Group, whose Nicosia offices were damaged by a bomb explosion on Sunday said the incident was related to a foreclosure and accused police of doing nothing when he repeatedly received threats while attempting to place the property in question under his administration.

Chris Iacovides said the threats came from the management of a Paphos hotel for which a court order had been issued in August to place it under administration after the proprietor company defaulted on its debt.

Repeated attempts to seize control of the hotel failed, as members of the management resisted but police stood by and did nothing, he said. The latest attempt was last Wednesday and again the police officers failed to intervene.

“The police in Paphos did not help us enforce the court order,” he said in a telephone interview. “Instead, we became the recipients of threats which prosecutors were still investigating”.

The blast which occurred at 7:25 pm on Sunday and is attributed to an improvised device, injured a 36-year-old male resident and damaged cars parked nearby in addition to damaging the ground floor of the building, police said.

The injured man was taken to the Nicosia general hospital where he was treated for injuries to the stomach. He was kept in overnight but was out of danger.

Following the blast, police on Monday arrested a 50-year-old suspect in Paphos who was brought to Nicosia for questioning. Police said he denied any involvement. A court in Nicosia ordered him to be remanded for eight days.

The incident is linked to four bonds in excess of €5m issued in favour of Alpha Bank as a security to a loan.

The default prompted the bank to terminate all credit facilities to the unit in 2015.

On August 31, the Paphos district court banned four members of the hotel management from accessing, operating, or managing the hotel.

The court also banned any person acting on behalf of the four from doing so. The order was issued following a motion filed by Iacovides.

The Cyprus Business Mail understands that the arrested suspect is one of the four hotel managers against whom the order was issued.

A police spokesperson said that the presence of the police aimed at ensuring law and order would be maintained and added that it is up to the court to decide whether the order was disobeyed or not.

“The matter is managed by Paphos police,” the spokesman said.

Non-performing loans, which account for 45 per cent of Cypriot banks’ loan portfolio, are considered one of the major risks for Cyprus’s financial and economic stability. The Central Bank of Cyprus repeatedly asked lawmakers to bolster the foreclosure and insolvency legislation, tentatively modernised as part of Cyprus’s economic adjustment programme.

The difficulties encountered in enforcing the court order highlight the findings of the World Bank which ranked Cyprus in 138th place among 190 countries in its 2017 Doing Business Report in terms of enforcing contracts.

The enforcement of the foreclosure legislation has repeatedly encountered obstacles in the past when it involved primary residencies.

In September, the auction of a foreclosed 263-square meter house in Engomi by Hellenic Bank attracted protestors from the Movement Against Foreclosures and support from all opposition parties. In October, the attempt to auction a 460-square meter house in Latsia again by Hellenic was also fruitless.


About Author

Stelios Orphanides is a journalist at To contact Stelios Orphanides: [email protected]

  • Bystander

    You take someone’s money for a period of time and then give yours forever. This is how loans are being perceived by many.

  • Mist

    So the hotel is still trading and might close at any moment. Might be nice to know which one as people might want to make alternative arrangements if they have bookings.

    • Barry White

      One can be sure that the Hotel’s booking and pre-payment desk is open for bizyness.

    • JS Gost

      With hotel occupancy being at at all time high I would love to meet this guys accountant.

  • Neroli


  • almostbroke

    This sounds like the action of one of the many ‘business men ‘ in Cyprus .

    • Neroli

      Yes a hotel one!

  • Vladimir

    Recipe: borrow money to run the business, get all cash out of it and never pay bills. If someone reminds you about your debt, especially debtor, put a bomb to discourage…
    Normal business culture of EU member state…

    • Neroli

      I think you mean normal business culture of Cyprus, I don’t know of other EU countries who do this!

      • Vladimir


  • Mist

    This is a foretaste of whats to come.

  • Barry White

    An encouragement for foreign investors to invest into the Sunny Isles. No or little rule of law and little or no enforcement. Time to suspend the European Aquis in the sunny south that is so beloved by the Elite and Politicians to quote and demand others follow.

  • Douglas

    The responsible body to oversee the Court decision is complied with rests with the Police,perhaps Police from Nicosia could be posted in to support local repossessions processes.

    • Cydee

      My thoughts too. Use police from a different area

    • Neroli

      They will need the riot polic sent in soon!

  • costaskarseras

    I condemn any form of violence and I believe is counterproductive, but this type of incident will become more common if the neoliberal Anastasiades is reelected. People who worked hard to start a business or to build a home will not and should not give up easily for the sake of the banks and for the benefit of the vulture funds and their local collaborators. I support wholeheartedly the protection of an ordinary main residence of every Cypriot family who is a victim of this manmade neoliberal robbery. In the event of the confiscation of businesses of vital importance to the national economy such as tourism, they should be nationalised and the owners should be compensated but they should not fall into foreign interests.

    • Roger Thecabinboy

      you are living in the past…and the situation will not get better if any other candidate were elected – not that that is an endorsment of Mr Anastiades, but because the others are no better, rather the Akelites are likely to repeat the folly of the past and spend money they have not got, which contributed to the crises of four years ago – Indeed I do find it strange that you expect the poor odinary working man to bail out the capitalists who have failed but rather you are happy to see Capitalists allowed to continue to live a life of luxury in big houses – the problem is that many cases not all the the money lent has been put into a business but unwisely spent on luxuries, like big house and cars… the failed capitalists should sell their assets, including their luxury houses and cars, and move in into something they can afford.

    • John Henry

      CK, you’re such a commie coward, which of course both words mean the same thing. You say you condemn the violence but clearly you hope it occurs again. If any violence was ever remotely valid, it would have been directed toward the man you kneel before with your mouth open, the Village Idiot. The fact that nothing has occurred speaks volumes of the people of Cyprus!

    • JS Gost

      OMG. Before bleating again, come to Cyprus and see what honest hardworking tax payers have to put up with on a daily basis. Your xenophobic closing just underlines how naive and blinkered you are. All the international banks left Cyprus because of how morally broken people were, this was not created by policies of systems, it was created by people not giving a toss about their country if wealth (albeit in the shape of debt) was on the table. Successive governments, including your loved socialists and communists, have pandered to peoples greed by buying votes with a totally bonkers economy run by charlatans and fraudsters that have been giving debt away for years. This has now ended and everyone is crying like 5 years olds, whilst a real 5 year old could have seen this situation coming years ago. As someone who has never lived beyond his means, worked hard and paid taxes I find this whole situation farcical and at the same time sickening. Blaming anyone else, as usual, for this mess is the ultimate Cyprus Problem.

    • Veritas

      People who’s working hard and paying back their loans have nothing to fear.
      It’s people with greed, who want more then they can afford and then avoid paying back their loans who’s facing problems.
      People need to take responsibility for their actions. An investment is always associated with a risk, like gambling
      Most of the “foreign interests” you’re referring to, are Russians, who’s stealing the money from their compatriots in Russia with the blessing of President Putin. They learned how to manipulate the “masses” during the communist era.

      • costaskarseras

        Contrary to what you believe, it is not only a Cyprus but the US,Germany, UK and many other countries with millions of people in poverty. “More than 300,000 people in Britain – equivalent to one in every 200 – are officially recorded as homeless or living in inadequate homes, according to figures released by the charity Shelter.” Many of these people who are in danger of becoming homeless, are hard working and who believe that it is their duty and responsibility to provide a home for their families. They didn’t borrow money to speculate on the stock market, give them work and decent wages and they will pay every cent they owe, unlike the bankers.

        Russian money deposited in Cyprus, this is small change and the houses they own in Cyprus are simply dachas in comparison with the money they squirrel away and their property in UK, Germany and the US. The Russian oligarchs living in Britain are famous for their extravagant lifestyles, expansive London mansions, owning football clubs, and super yachts.

        • Veritas

          My comment was based on above article where certain people (most probably one of the four hotel managers of a Paphos hotel) believe they are above the law and that paying back your bank loans are optional.
          In Cyprus there was a loan bonanza some years ago, where people took out loans without considering that they’re obliged to pay it back. Banks are also at fault, for not looking at the creditworthiness of each customer in relation to the size of their specific loan. But by far too many ignorant people took advantage of this opportunity, even though they knew very well that the slightest change in their financial status will create huge problems for them. In other countries, people in the same situation are forced to move to a smaller house/apartment so as to be able to meet their obligations to the bank. In Cyprus this seems not to be an option “re, this is my house and I don’t want to move”- attitude is unfortunately to common.
          Your description of the situation in Britain is more due to an unfair society in general. Britain was always a class society, hence the problems you describe.
          Russians in Cyprus have a huge impact, especially in Limassol where there are an estimated 42,000 Russians living today. Not only is there a problem with increased prices on houses and apartments, but also increased level of rents and cost of living. More and more locals find it harder by the day the make ends meet.

  • JS Gost

    This is a clear omen of what is to come. No conspiracies or foreign messing, just Cypriot arrogance and greed. Cypriots will not survive without foreign investment , but Cyprus will. Already businesses are being taken over and Cypriots are being excluded. I wonder why ? Second class citizens in their own country, surely not. As a population, don’t expect any help as the politicians and law will only dance for those with real money, not debt…. Too harsh, we’ll see.

  • costaskarseras

    Common sense tells me that when a tiny minority continues to increase its wealth and a big number of the working people (and their families) don’t have enough to eat and rely on soup kitchens and food banks, the system is not working for the working people. Not satisfied with the huge wealth the 1% have amassed, they also want to take people’s homes and to make them homeless. This is class war and a grotesque injustice suffered by million of people.

    Germanyis overflowing with surpluses created by the crisis in the rest of Europe. Germany’s economy is booming but many are destitute. Unemployment is low but one in five workers is paid less than ten euros an hour – they are known as the working poor. Many have qualifications, but are badly payed.

    In the UK over 40% of families are unable to put food on the table without using expensive credit cards or resorting to social services offered by charitable organizations thanks to the British people’s generocity.
    The statistics can be confirmed by taking a stroll in the major cities of these countries. Here in London, the homeless can be seen even in these cold comditions, sleeping rough on the doorsteps of shops. A few days ago on BBC’s London tonight, a young Polish couple were shown sitting on a door-step trying to keep warm.

    Surely the working people can run their economies for the benefit of themselves and their families and not for the parasitic few.

    • JS Gost

      Put the soap box away, the article is about criminal behaviour in Cyprus perpetrated by idiots who wanted wealth with having to work for it.