THE CRASH of the stock market, in which thousands lost their life savings or ended up with huge debts that they are still paying off today, ensured that very few people would ever again view the Cyprus Stock Exchange as a trustworthy institution. The CSE authorities may have introduced tighter controls and tougher regulations after the fiasco but, 10 years on, investing in the shares of companies listed on the exchange is still considered risky activity by the majority of people.
Once the damage is done, it is very difficult to change people’s perceptions, more so when the authorities fail to take punitive action against the culprits, professionals who knowingly misled investors with cooked accounts and unrealistic forecasts. The overriding impression created was that the law offered no effective protection to investors from dishonest businessmen looking to make a fast buck at the expense of gullible people.
Making the same mistake again
THIS SAME MISTAKE has now been made in the property market, which also went through a ‘bubble phase’, attracting all sorts of cowboys, posing as developers, who saw an opportunity to make a quick profit. Most of the buyers were foreigners and therefore easy prey as they were not aware of the Cyprus laws and were not guaranteed reliable legal advice.
The results are well-known and far from flattering for Cyprus. One couple recently lost their flat, some buyers were sold properties that had already been sold, others ended up in flats without electricity and there are close to 10,000 foreigner property-buyers without Title Deeds, praying that the developer would not go bankrupt and the bank takes over their property. There has been one positive case in which owners sued a lawyer who had misled them and were paid damages in the region of €100,000.
This mess has received extensive media coverage abroad, particularly in Britain from which most buyers of holiday homes came. British MEPs have raised the issue of Title Deeds at the European Parliament, thus making the problem known across Europe. It was the worst possible publicity the struggling holiday home market could have received as it amplified the effects of the recession and jeopardised the future of many developers.
Given that government proposals on the Title Deeds issue, which also affects some 90,000 Cypriots, will solve none of the old problems, there was only one way for Cyprus to rebuild its tarnished image – taking a tough line in cases of developers deceiving buyers that were brought before justice. It was critically important to show that the law offered protection to foreigners who had been deceived by locals; the case of the lawyer who had to pay damages to his clients was a step in the right direction.
But in the last week this good work has been undone by the case of Conor O’Dwyer who had been assaulted by three men (a developer he was in dispute with, the developer’s son and an associate) and was hospitalised for a week. His three attackers were found guilty of causing actual bodily harm by the court but the judge did not give a custodial sentence. Father and son were given a 10-month suspended prison sentence while the third man was fined €3,000. The developer had also crashed his car into O’Dwyer’s but for that misdemeanour the court gave him two penalty points, instead of three that would have caused him to lose his licence.
The court’s leniency towards O’Dwyer’s attackers was quite astonishing and will not boost the confidence of foreigners in our justice system. It is more likely to encourage the view, rightly or wrongly, that the courts are not very tough on crimes by Cypriots against foreigners. To add insult to injury, O’Dwyer now faces criminal charges for posting offensive and harassing messages “without reasonable cause”, for publishing personal data and for threatening violence.
The Attorney-general may have been obliged to charge O’Dwyer after the police received a complaint, but it seems bizarre that the state would prosecute for alleged offences committed six years ago. On Friday it was reported that the Attorney-general would lodge an appeal against the court’s decision and lenient sentence in the O’Dwyer case. One prosecutor told the Cyprus Mail: The Attorney-general’s position is that nothing changes because he is British or any other nationality. Justice is for all.”
The authorities may have finally realised the damage being done to Cyprus’ image by our system’s failure to protect property buyers, but unfortunately, this seems like a case of too little too late.