GOLD MAGAZINE ISSUE 44

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ISSUE 44 NOVember 14 - december 13, 2014 PRICE €4.95

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the international investment, finance & professional services magazine of cyprus

Christos Mavrellis Managing Partner, Chrysses Demetriades & Co LLC

Christos Mouskis Chairman, Μuskita Hotels

PHIDIAS PILIDES

ANDREAS DEMETRIOU Country Managing Partner, EY (Main Sponsor)

President, Cyprus Chamber of Commerce & Industry (Organiser)

LEADERSHIP

excellence Brought to you by

The recipients of the 2014

KEBE Business Leader Awards

SHIPPING

INTERVIEWS

LIFESTYLE

The Tide Is High Fleet Management celebrations

George Papanastasiou Christos Theocharides Andrew Lumley-Holmes

Touch the Sky Minthis Hills Luxury Resort

MICHALIS (ALKIS) H. HADJIKYRIACOS Executive Chairman and Managing Director, Alkis H. Hadjikyriacos (Frou-Frou Biscuits) Public Ltd

ANDREAS ELEFTHERIADES President, European University Cyprus

12 PAGES ON THE AWARDS The Recipients

PARIS PAPAELLINAS Managing Director, Costas Papaellinas Organisation

The Event

PLUS MONEY / BUSINESS ECONOMY TAX & LEGAL LIFESTYLE / OPINION

CAPTAIN HEINRICH SCHOELLER Chairman, Columbia Shipmanagement

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Friday 31 October, 2014 Evagoras Lanitis Centre (Carob Mill Complex), Limassol

The CCCI and IMH thank the sponsors of the KEBE Business Leader Awards Main Sponsor

Gold Sponsor

ƇƹƬƭƫƱ

Silver Sponsors

Organisers ΚΥΠΡΙΑΚΟ ΕΜΠΟΡΙΚΟ ΚΑΙ ΒΙΟΜΗΧΑΝΙΚΟ ΕΠΙΜΕΛΗΤΗΡΙΟ

CONGRATULATIONS TO THE RECIPIENTS OF THE KEBE BUSINESS

LEADER AWARDS CHRISTOS MOUSKIS Chairman Μuskita Hotels Business Leader in the Tourism, Hospitality and Leisure Sector CAPTAIN HEINRICH SCHOELLER Chairman Columbia Shipmanagement Business Leader in the Shipping Sector MICHALIS (ALKIS) H. HADJIKYRIACOS Executive Chairman and Managing Director Alkis H. Hadjikyriacos (Frou-Frou Biscuits) Public Ltd Business Leader in the Manufacturing Sector PARIS PAPAELLINAS Managing Director Costas Papaellinas Organisation Business Leader in the Commercial Sector CHRISTOS MAVRELLIS Managing Partner Chrysses Demetriades & Co LLC Business Leader in the Financial and Professional Services Sector ANDREAS ELEFTHERIADES President European University Cyprus Business Leader in the Services Sector GEORGE PARASKEVAIDES EY Honorary Award: Overall Contribution to Entrepreneurship

12 N G A P ES O ARDS THE AW s

nt ecipie The R

t The Even

8 EDITORIAL 10 UP FRONT 16 FIVE MINUTES WITH…

Issue 44 November 14- December 13, 2014

+ OPINION THE ECONOMIC POWER OF MIGRATION By Dr Savvas Savouri 78

18 74 80

32 FEATURES 30 | WORLD-CLASS SPEAKERS AT THE 5th LIMASSOL ECONOMIC FORUM This year’s gathering looks set to be the best Economic Forum so far, not least because of the presentation by Lord Dobbs of Wylye, better-known as Michael Dobbs, bestselling author of House of Cards.

32 | SIZE MATTERS! It may be a small country but, when it comes to technology, Cyprus has a great deal going for it, says Christos Theocharides of AMS.

36 | THE TIDE IS HIGH Fleet Management Limited has just celebrated its 20th anniversary.

SPECIAL

72 72 | CARREFOUR TO THE RESCUE! Michalis Panayides, Commercial Director of Carrefour Cyprus, explains how the island’s biggest retailer supports society through the bad times as well as the good.

74 | AN ENGLISHMAN ABROAD Andrew Lumley-Holmes, an international independent financial adviser, arrived in Cyprus in July, having spent the previous six and a half years living and working in Moscow and Hong Kong.

80 | TOUCH THE SKY Taking shape in Paphos, Minthis Hills resort is set to elevate Cyprus’ island living to stratospherically lavish proportions.

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EDITORIAL

Follow the Leader Leadership and learning are indispensable to each other. John F. Kennedy

Y

ou may have had a feeling of déjà vu on seeing this month’s cover photo. More awards? Well, yes, but these were somewhat different from other business awards that are handed out in Cyprus and elsewhere in that, for a change, they honour individuals rather than companies and organisations. The goal of the KEBE Business Leader Awards, organised on 31 October by the Cyprus Chamber of Commerce & Industry (KEBE being its Greek acronym) and IMH, is to recognise individual leadership excellence in key sectors of the Cyprus economy. Few would question the choice of leaders selected to receive one of the seven inaugural awards (see pages 24-29 for more details) and the truth is that there is already no shortage of good candidates for the Business Leader Awards in the years to come. The country’s private sector could not thrive without good leaders but what of those who take on the role of leader in other areas? The political leaders, the party leaders, the spiritual leaders? Anyone with a basic knowledge of modern Cypriot history can tell you that great leadership has been conspicuous by its absence and some would simply point to the island’s present circumstances as proof of the argument. This is to simplify things, of course, and is a disservice to the few exceptions to the rule – you will be hard pushed today to find anyone who does not recognise the success of President George Vassiliou’s term of office (1988-1993), even if he failed to secure a second five years – but our experience of the last decade is enough to convince us that our leaders have, to a greater or lesser extent, failed us. Would we be able to find seven nominees for the Political Leader Awards? It is very unlikely, even if we were honour someone posthumously. And for every President of the Republic, there are countless “wannabes”, many of them in the House of Representatives who have really been showing their true colours recently and letting everyone see that their populism and self-interest knows no bounds: populism in the way they were willing to jeopardise the disbursement of €350 million by passing bills which they knew were unacceptable to the Troika; self-interest in the way they raised a great fuss about the use of official cars by public officials and then passed legislation entitling “only” 29 officials to use an official car 24 hours a day and another 73 officials eligible to use one for official duties and, in any case, postponing the law’s enforcement until 2016. Among those entitled to a free car are all past Speakers of the House and MPs are not likely to remove such a privilege from their party colleagues... US media figure Walter Cronkite once said: “We are not educated well enough to perform the necessary act of intelligently selecting our leaders.” At least this suggests that Cyprus is not the only place where that happens. Fortunately, business leaders are more plentiful here and many of them will be gathering in Limassol for the 5th Limassol Economic Forum on 28 November. Among the speakers is Lord Dobbs of Wylye, better to known to most of us as Michael Dobbs, the author of House of Cards, which has twice been filmed for television. Those who have read the trilogy or seen the BBC adaptation will know that there is a fascinating Cyprus connection with the third book The Final Cut, where Francis Urquhart champions a treaty resolving the Cyprus Problem while secretly working to bring offshore oil deposits under the control of the Turkish Cypriots so that a Turkish-British consortium will have the drilling rights. This John Vickers, was written 20 years ago! Dobbs is clearly a man with the vision Chief Editor required of a great leader. Let’s give him citizenship at once! john@imhbusiness.com

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THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

BANKING How Spain restructured its system

BITCOIN The Future of the Digital Currency

INTERVIEWS Peter Greenberg Matthew Kidd Alexis Tsielepis

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8 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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UP FRONT

DHL Introduces the Parcelcopter

D

HL recently beat all the competition to become the first company to use a small drone to make deliveries. Medication and other urgently needed goods will be regularly delivered to the North Sea island of Juist, in Germany, by a flying delivery drone, nicknamed the Parcelcopter. If the pilot project proves successful, it will be used for the delivery of parcels to other remote or isolated areas. DHL’s yellow drone is powered by four identical fixed pitch propellers.

Its total weight is 5kg (including the delivery parcel), with the weight of the aircraft alone standing at a mere 3.8kg. According to the company, the parcelcopter takes a fully automated route and can be steered in any direction. The parcel will be placed below the aircraft in a yellow container. DHL has developed a special air-transport container that is extremely lightweight and constructed to protect against rain, snow and dust, in order to optimally secure the goods during transport.

CYPRUS BANKS EMERGE WELL FROM

STRESS TESTS

T Caramondani Group’s New Headquarters

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VIBER SEEKS PARTNERSHIPS FOR GAMING PLATFORM PROJECT

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yprus-based instant messaging smartphone application Viber Inc. is reportedly exploring possible partnerships with social-gaming companies, in order to establish a gaming branch of services. The Israeli startup, which was acquired by Japanese e-commerce giant Rakuten Corp. in February of this year, is seeking partners to facilitate the integration of games into its instant messaging, voice and video calls service. Viber Chief Executive, Talmon Marco, previously revealed that the company would announce a gaming platform this year, a service Viber hopes will create new revenue. Viber offers a free instantmessaging service, as well as charged calls to landlines or phones that don’t have the Viber application installed. At the time of acquisition, Rakuten said Viber had roughly 300 million users. Following the completion of the deal, Rakuten Chief Exeutive, Hiroshi Mikitani, commented that the company has “tremendous potential as a gaming platform.�

10 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

hree Cyprus banks completed the European Central Bank’s panEuropean stress tests with a capital surplus, while one concluded the exercise with a manageable shortfall. Though capital shortfalls were revealed for Bank of Cyprus, the Cooperative Central Bank (CCB) and Hellenic Bank, the results of the baseline scenario were calculated after taking into account the recapitalisations already made or announced in 2014, showing that no Cypriot bank needs additional capital, as the measures taken more than cover the capital needs which were calculated through the exercise. According to the ECB results, Cyprus Cooperative Central Bank recorded a surplus of â‚Ź331 million, Bank of Cyprus a surplus of â‚Ź81 million, and RCB a surplus of â‚Ź112 million. Hellenic Bank, meanwhile, registered a capital shortfall of â‚Ź176 million but the bank announced further mitigating factors, amounting to â‚Ź71 million, therefore reducing the overall capital shortfall to â‚Ź105 million. It will proceed with a rights issue, to cover the capital shortfall that emerged from the exercise. In a press release, the Central Bank of Cyprus described the results as “very positive,â€? noting that they will be conducive to strengthening general confidence in the country’s credit institutions, which will, in turn, contribute to economic growth.

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SUPREME COURT RULES

FORECLOSURES BILLS

UNCONSTITUTIONAL

25% of The Oval Sold T ess than six months since The Oval was presented to the public for the first time, Cybarco Development Ltd has already sold 25% of the building. Construction work is progressing as scheduled, according to Cybarco CEO Michalis Hadjipanayiotou. Situated in the heart of Limassol, just 100 metres from the sea, the landmark 16-floor structure scheduled to be completed by the end of 2016. Designed by world renowned architects Atkins, in collaboration with architects WKK and Armeftis & Partners, The Oval will be the tallest commercial building in Cyprus, reaching some 75 metres. Cybarco, a leading Cyprus luxury property developer, is part of the Lanitis Group. Other notable Cybarco projects include Akamas Bay Villas, Sea Gallery Villas and Limassol Marina, the country’s first residential marina project.

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CORRECTION

he Supreme Court reached a unanimous verdict on October 31, ruling that four foreclosures bills approved by the House of Representatives were unconstitutional. The bills were referred to the Supreme Court by President Nicos Anastasiades. New foreclosures legislation was a precondition for the island’s next tranche of financial aid from its Troika of international lenders. The 6th programme tranche of â‚Ź433 million was not disbursed in September 2014 as planned, due to the fact that, in the Troika’s view, the four controversial bills essentially prevented banks from taking effective action on non-performing loans. Government officials described the court ruling as “a win-win situation,â€? as Cyprus will now be able to resume its economic adjustment programme. “This is the time for responsibility, consensus and cooperation between the government and political parties, to form a strong and effective framework on insolvency that will safeguard even more vulnerable groups of the population and the main residence of those who need the protection of the state,â€? said Deputy Government Spokesman Victor Papadopoulos.

Due to a mistaken entry in the Gold photo archive, last month’s interview with Wes Porter, CEO of Hermes Airports was accompanied by a photo of his predecessor in the post. We apologise for the error.

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UP FRONT

CIPA International

Investment

Awards Lunch I MH and Gold magazine held a celebratory lunch at the Hilton Park Hotel Nicosia on Wednesday October 15 for the recipients of this year’s CIPA International Investment Awards and the sponsors of the event which took place at the Presidential Palace on 10 September.

Marios Kapiris, IBM and Marios ;HUV\ZZPZ *07(

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12 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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UP FRONT

WISTA Annual General Meeting and Conference 2014

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he Women’s International Shipping & Trading Association (WISTA) held its 2014 in Limassol last month with delegates attending from 35 countries. The theme of the conference was “Shipping Connects”, chosen, as Despina Panayiotou Theodossiou,

President of WISTA Cyprus said during her opening address, “to encourage the exchange of ideas on some of the most current and interesting topics facing the maritime industry.” From the opening session, which challenged representatives from several shipping companies and

Delegates from WISTA USA

trade associations on their views of performance through and folSV^PUN [OL ÄUHUJPHS JYPZLZ [V [OL ÄUHS ZLZZPVU ^OPJO VɈLYLK [OL forward thinking idea of salvage companies participating in ship design, the audience enjoyed and was engaged throughout the event. WISTA Cyprus Executive Committee

Karin Orsel, President, WISTA International Despina Panayiotou Theodosiou, President of WISTA Cyprus, and Socrates Theodosiou

Alecos Michaelides, Permanent Secretary, Ministry of Communications & Works

Marianna Charalambous, John Tomich, Finn Amund Norbye

Marios Demetriades, Minister of Communications & Works

14 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

2014 KPMG Compensation and Benefits Survey Following the successful completion of KPMG’s Compensation and Benefits Survey in 2008, 2009 and 2011, KPMG’s People & Change Practice announces the launch of the 2014 KPMG Compensation and Benefits Survey. The KPMG Compensation and Benefits Survey is the only large scale compensation survey which provides representative data for the Cyprus labor market. The Survey’s participants are companies of all sizes operating within different sectors of the Cyprus market thus allowing our expert Advisors to tailor the positions analyzed and the information presented within the report to the specific needs of the Cyprus labor market. Aiming to provide our clients with valuable and significant information which will enable their companies to build a competitive advantage in the labor market, the main objectives of this year’s Survey are the following: •

• •

To present the common policies, practices and strategies of compensation and benefits implemented by a representative sample of companies operating within the Cyprus market; To present remuneration and benefits data of 180 generic and industry-specialized positions; and To present the impact of the economic crisis on remuneration and benefits data.

We would be honored to have your company participate in the Survey, by providing us with all the required information. All participants shall benefit by participant specific prices for the purchase of the final report and publicity upon the announcement of the Survey’s results. For more information, please contact us: George Tziortzis Board Member Head of Management Consulting T: 22 209292 E: gtziortzis@kpmg.com Marios Papalazarou Associate People & Change T: 22 209107 E: mpapalazarou@kpmg.com

www.kpmg.com

©2014 KPMG Limited, a Cyprus limited liability company and member of the KPMG network of independent member firms affiliated with KPMG International Cooperative (”KPMG International”), a Swiss entity. All rights reserved.

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