Ayia Napa Mayor Christos Zannettou has been accused of unlawfully securing a €765,000 European grant for a hotel renovation project in which he held a stake.
The mayor finds himself entangled in a criminal case less than a month ahead of the municipal elections in which he is a candidate alongside Martis Martis, Kyriakos Tsiakkurmas and Neophytos Michael.
Zannetou’s lawyer, Elias Stefanou, said the fact that the case resurfaces so close to the election period “raises concern”.
The case, concerning the alleged tampering of the financial records of the hotel’s owning company, was registered last month at the Famagusta District Court. Zannettou was supposed to be referred to a direct trial before the Criminal Court on May 24, however, the date was postponed to June 13, four days after the elections on June 9.
The hotel in question had been initially approved for the incentive plan for sustainable enrichment investments and upgrading of the tourism product co-financed by the European Regional Development Fund of the European Union in 2010. However, five years later, the project was withdrawn after the Directorate General for European Programmes, Coordination and Development of the Republic of Cyprus demanded the withdrawal. It was determined that the project did not meet the criteria for inclusion in the scheme.
Several reports by the audit office highlighted the case, which in 2016 called for the matter to be referred to the attorney-general, as it highlighted that there may be criminal offenses involved explaining how the financial statements submitted by the company in question were falsified.
In the same report, the Audit Office suggested the criminal investigation of members of the Cyprus tourism organisation (CTO). The project, according to those reports, was granted funds that it was not eligible for. Consequently, the expenditure certified to the EU was deducted in its entirety with a financial correction of €765,486.
In September 2018, the Cyprus tourism organisation’s board of directors decided to sue the hotel’s ownership company to recover the grant funds along with interest and expenses.
A month later, Famagusta police said that following an investigation no criminal offenses were detected among CTO members, although some were found to have committed disciplinary infractions. The cabinet then appointed an Investigating Officer to look into the actions of certain CTO officials to determine whether they committed any disciplinary offenses that resulted in financial losses for the state.
After concluding the police inquiry, the case was referred to the Legal Service, which requested additional examinations. The procedures were completed and the case has been formally registered before the courts.
However, the mayor’s lawyer told the media that until Monday afternoon no indictment had been received. In light of recent reports, Stefanou said his office will investigate further and that “the only certainty is that there was some police investigation many years ago”.
“It raises a concern, if it is true, that while nothing was done for so many years, such a case was pushed forward 20 days before the elections,” Stefanou said.
Among the charges Zannetou is facing are forgery and obtaining money by false representation.
Reports suggested politicians were cancelling meetings arranged with the mayor ahead of the coming elections citing the pending court case.
Zannettou was elected Mayor of Ayia Napa in 2020 after the then mayor Yiannis Karousos was appointed transport minister in December 2019.
