London: A federal investigation is nearing completion into alleged donations made to Cypriot political parties through Focus Maritime Corporation, controlled by chairman and CEO of NewLead Holdings, Michalis Zolotas.
“We have gathered a massive body of evidence that is being processed by investigators and experts. As a result of this, progress has been slow,” Cyprus’ attorney-general Costas Clerides told the Cyprus Mail.
Cyprus’ parliament is to vote on reforms to party financing laws before the summer recess, reports say. Politicians initially pledged to reform the financing system after the European Parliament elections of 2014, but law-making has been postponed repeatedly.
In late 2007 and early 2008, Focus allegedly donated €1.5m to AKEL and €500,000 to DISY, according to reports in the Cypriot press.
In 2007, Zolotas participated in raising $5.2bn in capital for MIG, an investment group headed by disgraced former Laiki Bank executive Andreas Vgenopoulos. Reports say Zolotas used funds loaned to him by Marfin-Laiki bank (as it was then known), collateralised by the MIG shares bought. Vgenopoulos has denied the claims.
Focus is also alleged to have paid €1m to Christodoulos Christodoulou, former governor of the Central Bank of Cyprus, in July 2007, two months after Christodoulou had stepped down as governor. Christodoulou justified the payment as “consultancy services for 10 years, paid in advance” and in 2014 served five months in prison for failing to pay tax on the amount received.
Zolotas is the vice-chairman, president and CEO of Focus Maritime. In 2009, Focus converted $217.3m of debt into equity in NewLead Holdings through an issue of convertible senior notes. The notes are due for conversion this year into 264,939,024 shares in NewLead’s common stock.
Focus Maritime is not the only company implicated the political financing scandal. A German company that won a contract to build a sewerage treatment plant in Cyprus is alleged to have given kickbacks to then mayor of Paphos, MP Fidias Sarikas.