The corrupted spirit of laissez-faire authorities

Mr Dead is Alive!
Mr Z ran a business under the name of his Cyprus registered company. In 2004, Mr A bought Mr Z’s private residence. He moved out of the property and Mr A moved in, eventually getting his title deeds. Sometime in 2007/8, Mr A received an e-mail from Mr Z’s wife informing him that her husband had just died. Sad, Mr A thought, but did not dwell on the matter.
Suddenly, in February 2015, Mr A received at his home address (the same property he had bought from Mr Z) two notices from the Cyprus Registrar of Companies regarding Mr Z’s company. The second even included a set of HE4 company registration documents, all duly stamped by the Registrar, and clearly showing the registered address as Mr A’s. Moreover, the papers included the application for registration, which had been done by a registration services company in Polis and dated in February 2015. These were clearly made in Mr Z’s name and even included his name in several signature boxes! Yes, miraculously, a person dead some 8 years had come alive and even signed his name to prove it!
Mr A e-mailed the Company Registrar twice to notify him that (a) Mr Z had relinquished all rights to and connection with Mr A’s private residential address in 2004, (b) Mr A had never, at any time, whether expressly or implied, authorised the use of his private address for any person to use as the registered address of their company, and (c) Mr A had been notified of Mr Z’s death in 2007/8. He requested the Registrar’s immediate corrective action.
Mr A felt sure that the Company Registrar would act immediately. After all, he had been provided with evidence of false registration of a company in the name of a dead person, false and unauthorised registered address and apparent forgery of a dead person’s signature. As Mr A noted, if the issue is one of Mr Z’s existence, it is not his job to provide the Registrar with proof of Mr Z’s death; it is the Registrar’s responsibility to demand ‘proof of life’ either from Mr Z himself or from his registration agent. Mr A assumed that either way, dead or alive, no one can use another person’s address without the owner’s authorisation. Who knows what unlawful activities, such as tax evasion, may have motivated this dodgy registration after so many years? Imagine his shock when his lawyers advised that it is not unlawful to use in such registrations someone else’s address without their permission! And, only the directors of the registered company can, if they wish, choose to alter the registered address.
However, beyond Mr A’s indignation at the cheek of those involved, and the laid-back attitude of the Registrar, this case has exposed a much graver risk to Cyprus in two areas: international money laundering and the parking of funds for terrorism. If, as is apparent, it is so easy in Cyprus for anyone (even a dead person) to get a company registered in their name and at someone else’s address without their approval or consent, then one can be pretty sure that criminals and terrorists are already exploiting this weakness. For example, the on-going criminal trial in India of the former Telecommunications Minister Mr A. Raja on multiple counts of bribery, corruption, fraud and money laundering involving about EUR 479 mln, has heard prosecution evidence alleging that the accused channelled millions in bribe money via a set of 32 dummy companies registered in Cyprus and then onward to accounts in the Maldives and Seychelles. The Cyprus authorities are aware of this case but appear to have turned a blind eye.

The Self-Styled Professionals
Mr B sent a preliminary enquiry by e-mail to a civil engineering consultancy listed on one of the government’s lists of registered specialists. To save their embarrassment, let’s call them by the fictitious name Icarus Consultants. He stated the square metres and other basic details and made it clear that it was a preliminary enquiry seeking the answers to two basic questions before deciding whether or not to proceed further, namely (1) the basis of the firm’s charges for work and an indicative costing, and (2) whether or not a certain condition in the relevant regulations would apply. Mr B had already approached others on the list and they had obliged with the requested information. After all, there was nothing complicated about the questions or the required answers and Mr B was not asking them to do any unpaid work. Icarus was not being asked to divulge commercially or intellectually valuable information or give a professional opinion.
The response Mr B received from Icarus was simply a request to phone and set up a meeting and did not include the requested answers. So, he advised the Icarus boss that perhaps he had misunderstood that it was an initial enquiry that did not warrant a meeting, only simple answers to two very simple questions. After receiving no further response, Mr B sent a reminder. This time he received an incredibly vitriolic e-mail accusing him of refusing a meeting offered by a ‘qualified professional’ (sic). Icarus were refusing point-blank to divulge anything, even the basis of their charges, without a face-to-face meeting. Further, the e-mail contained threats of legal action if Mr B should report his appalling experience at their hands to anyone else!
Unsurprisingly, Mr B immediately dropped Icarus from his list of potential consultants. Market forces won the day and the reputation of Icarus now goes well and truly before them. However, there is a wider issue. Typically, a professional body’s code of conduct includes requirements such as ‘…members should do nothing that in any way could diminish the high standing of the profession. This includes any aspect of a member’s personal conduct which could have a negative impact on the profession’ (Institution of Civil Engineers). Was the rude, aggressive, and threatening outpouring from Icarus professional? What criteria does the relevant government department use to appoint such appalling people to approved lists? Simply receipt of an application form and the fee? There is no evidence of proper due diligence checks, otherwise inadequate self-styled ‘professionals’ like Icarus would be blocked.

Conclusions
The two reports above share a common theme: lack of due diligence by the competent authorities, leading to increased risk exposures for the public. They just don’t care. It relates to the President’s ‘clean-up’ message and smacks of what Polis Polyviou complained about in his Mari-Vassilikos Inquiry Report about a state ‘whose primary purpose is to facilitate the lives…. of public officials’ (page 590) and which there is ‘a reduced perception of duty and a selected observance of morality and legality’ (page 591). Or, in other words, a corrupted spirit. Ten out of ten, Mr President, for tackling white collar criminals but zero for cleaning up the corrupted spirit among public officials.