Kassinis says quitting state hydrocarbons company

ENERGY chief Solon Kassinis has called it quits from the state hydrocarbons company KRETYK, citing concerns over the company’s role and scope.
It later emerged, however, that tensions between himself and Commerce Minister Neoclis Sylikiotis may have prompted Kassinis’ decision to walk away.
At any rate, last night the commerce minister said he had yet to receive Kassinis’ resignation in writing.
Kassinis’ intention to step down comes just a month after he and three others were appointed non-executive directors in tandem with the company’s official unveiling.
Asked by newsmen earlier yesterday why he was leaving the post, Kassinis cited certain ‘problematic’ clauses of KRETYK’s articles of association, in particular that which empowers the entity to monitor commercial contracts between the state and other companies.
Article 6 of the founding document states that KRETYK may, “acting on behalf of the Republic, administer and/or check the correct implementation of the terms of relevant contracts that have been concluded in the past or will be concluded in the future by the Republic of Cyprus or its government.”
According to Kassinis, that empowers KRETYK to conclude commercial agreements – a point not disputed – but at the same time to exercise oversight on these same agreements, and ultimately on itself.
“A state company cannot check the contracts of other companies and also have a supervisory and regulatory role. It should be limited only to the commercial aspect,” Kassinis said.
“It cannot possess oversight over the other companies, because there would be no transparency, nor would foreign countries or companies be able to trust us. Besides, this is prohibited by EU regulations.”
Kassinis had proposed that an independent agency be established to scrutinize the contracts.
Mired in political controversy since its inception, KRETYK is a limited liability company with a starting capital of €1 million divided into one million shares of €1 each.
Though fully state-controlled – the shares are vested in whoever holds the position of Commerce Minister – the company is governed by private law.
As such, it is not subject to financial oversight by either the Auditor-general or parliament – a point on which opposition parties have kicked up a storm.
And given that KRETYK cannot be directly financed by the treasury – as there is no provision in the state budget for 2012 – a decision was made recently for the company to apply for a €900,000 loan from a cooperative bank.
Kassinis revealed yesterday it was Sylikiotis who asked him – as the interim head of the company’s board (until such time as the executive directors are appointed) – to put his signature on the loan application.
The €900,000 loan, backed by a government guarantee, would be used for the operating expenses of the company plus the remuneration of the three executive directors, he said.
It’s understood the executive directors’ pay will be upwards of €100,000 per annum.
Kassinis said he was uncomfortable with applying for the loan on behalf of KRETYK, so he suggested that Sylikiotis apply instead.
“After all, he is the owner of the company for the time being,” Kassinis said, alluding to the commerce minister.
Speaking to the Mail later in the day, Kassinis confirmed earlier press reports that he had sought the post of executive director on KRETYK, but Sylikiotis was of a different mind.
“We’re talking about the pinnacle of ingratitude, after all my years of service,” he remarked.
In addition, he claimed that Sylikiotis “insulted him” during a recent function, where Kassinis publicly voiced his reservations about some of the aspects of KRETYK’s operation.
“The minister basically barked at me in front of everyone. That’s something I cannot put up with. If I’m not appreciated, what’s the purpose of staying on?” he said.
Kassinis confirmed also he and Sylikiotis held a meeting on the morning of October 2 to discuss the former’s role in the company. That same day KRETYK was listed with the Registrar of Companies. The company’s official unveiling by Sylikiotis came two days later.
The energy chief also sits on a government-appointed panel tasked with evaluating the bids submitted for Cyprus’ offshore blocks.
His resignation comes in the wake of reports of disagreements over the awarding of an offshore gas exploration licence. Some members of the evaluation panel were said to be “outraged” with the Cabinet’s decision to award the Block 9 licence to a consortium consisting of Total E&P Activities Petrolieres (operator), NOVATEC Overseas Exploration & Production GMbH and GPB Global Resources BV (a Gazprom subsidiary).