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Cyprus Mail: Companies changing hands without owners' permission could
be money laundering
17:54 04/07/2013 » ECONOMY
The ownership of a number of Cyprus-registered companies has changed
hands in dubious circumstances, in what amounts to fraud and possibly
money laundering activities, MPs said yesterday, according to Cyprus
Mail.
The House Institutions Committee was discussing complaints lodged by
beneficial owners of companies who saw ownership transferred to others
without them having approved it - pointing to document falsification.
Some of the companies in question are understood to have operated with
nominee shareholders - a common practice.
An official from the Attorney-general's office told lawmakers that 10
such complaints were filed to police by businessmen; of these, six
were then forwarded by the police to the Attorney-general as
potentially warranting criminal investigation.
However the AG's office subsequently determined that a criminal case
could not be made based on the available evidence.
Rather, the majority of the cases seemed to involve disputes between
the concerned law firms representing the companies, the official said.
But MPs, who meantime are also probing broader banking and corporate
practices that led the financial sector to the brink of collapse,
decided to press on with the matter.
Speaking to newsmen later, committee chairman Demetris Syllouris
described the reports of suspect ownership change as `theft or
abduction of companies'.
`With the current system, it is alarmingly easy to transfer ownership
from one person to another. It's easier to transfer ownership of a
multi-million company than to register an aluminium-fabricating
company with your son,' he noted.
Taking it a step further, Syllouris alluded to Moneyval's report on
due diligence measures in the local banking sector.
`The whole affair [ownership of companies] smacks of money laundering.
It is not a simple matter of shortcomings in our system, it is a most
serious issue that could tarnish our reputation as a financial
services centre,' he said.
Among other things, the Moneyval report noted `potential effectiveness
issues... with respect to the identification and verification procedures
of legal entities registered with the Registrar of Companies in Cyprus
due to the incomplete data which was available at the registry.'
Spyros Kokkinos, head of the Department of the Registrar of Companies
and Official Receiver, said the system in place has remained virtually
unchanged for the last 50 years.
Although the registry system is being automated (as of late 2012),
Kokkinos said this should be coupled with adequate checks against
fraudulent signatures as well as personal login codes.
Melina Pyrgou of the Bar Association said company documents are often
signed abroad by notaries and are then brought to Cyprus for the
changes to be approved.
Computerising the system would certainly diminish forgeries but would
not completely wipe them out, she said.
Speaking to the Cyprus Mail, committee member and EDEK MP Pheidias
Sarikas was more cautious than Syllouris, acknowledging the lack of
hard evidence for money laundering.
`That is why we are saying it could possibly involve money laundering,' he said.
`What we can say for the time being is that certain shady operators
appear to be taking advantage of the shortcomings or loopholes in the
system,' he added.
The commerce ministry, responsible for the Registrar of Companies, has
commissioned a study into the workings of the department. The study
has been assigned to the Institute of
Certified Public Accountants of Cyprus, the Cyprus Investment
Promotion Agency and the Bar Association. Their preliminary findings
have been forwarded to the ministry.
http://www.panorama.am/en/economy/2013/07/04/cyprus-pastinfo/
be money laundering
17:54 04/07/2013 » ECONOMY
The ownership of a number of Cyprus-registered companies has changed
hands in dubious circumstances, in what amounts to fraud and possibly
money laundering activities, MPs said yesterday, according to Cyprus
Mail.
The House Institutions Committee was discussing complaints lodged by
beneficial owners of companies who saw ownership transferred to others
without them having approved it - pointing to document falsification.
Some of the companies in question are understood to have operated with
nominee shareholders - a common practice.
An official from the Attorney-general's office told lawmakers that 10
such complaints were filed to police by businessmen; of these, six
were then forwarded by the police to the Attorney-general as
potentially warranting criminal investigation.
However the AG's office subsequently determined that a criminal case
could not be made based on the available evidence.
Rather, the majority of the cases seemed to involve disputes between
the concerned law firms representing the companies, the official said.
But MPs, who meantime are also probing broader banking and corporate
practices that led the financial sector to the brink of collapse,
decided to press on with the matter.
Speaking to newsmen later, committee chairman Demetris Syllouris
described the reports of suspect ownership change as `theft or
abduction of companies'.
`With the current system, it is alarmingly easy to transfer ownership
from one person to another. It's easier to transfer ownership of a
multi-million company than to register an aluminium-fabricating
company with your son,' he noted.
Taking it a step further, Syllouris alluded to Moneyval's report on
due diligence measures in the local banking sector.
`The whole affair [ownership of companies] smacks of money laundering.
It is not a simple matter of shortcomings in our system, it is a most
serious issue that could tarnish our reputation as a financial
services centre,' he said.
Among other things, the Moneyval report noted `potential effectiveness
issues... with respect to the identification and verification procedures
of legal entities registered with the Registrar of Companies in Cyprus
due to the incomplete data which was available at the registry.'
Spyros Kokkinos, head of the Department of the Registrar of Companies
and Official Receiver, said the system in place has remained virtually
unchanged for the last 50 years.
Although the registry system is being automated (as of late 2012),
Kokkinos said this should be coupled with adequate checks against
fraudulent signatures as well as personal login codes.
Melina Pyrgou of the Bar Association said company documents are often
signed abroad by notaries and are then brought to Cyprus for the
changes to be approved.
Computerising the system would certainly diminish forgeries but would
not completely wipe them out, she said.
Speaking to the Cyprus Mail, committee member and EDEK MP Pheidias
Sarikas was more cautious than Syllouris, acknowledging the lack of
hard evidence for money laundering.
`That is why we are saying it could possibly involve money laundering,' he said.
`What we can say for the time being is that certain shady operators
appear to be taking advantage of the shortcomings or loopholes in the
system,' he added.
The commerce ministry, responsible for the Registrar of Companies, has
commissioned a study into the workings of the department. The study
has been assigned to the Institute of
Certified Public Accountants of Cyprus, the Cyprus Investment
Promotion Agency and the Bar Association. Their preliminary findings
have been forwarded to the ministry.
http://www.panorama.am/en/economy/2013/07/04/cyprus-pastinfo/