Cyprus developer deserts investors

The investors are buying properties in the Amaranta Village, claimed to be the biggest ever development undertaken in the Turkish Republic of Northern Cyprus. Covering six square miles of the Amaranta Valley, it is being built by AGA Development Construction Ltd and marketed by Armaranta Estates.

A majority shareholder in AGA is Gary Robb. His ‘vision’, said Amaranta Estates, was to create ‘a village with shops, post office, restaurants and a village pub, all set around a beautiful lake with the most stunning backdrop of the Five Fingered mountain’. And in case investors might be worried about problems with their title because the land had formerly been owned by Greek Cypriots who had been forced to flee when Turkey invaded the Island in 1974, the company promised that: ‘if you have purchased or are thinking of purchasing a property from AGA Developments Ltd, then in the unlikely event of a claim for compensation being upheld, AGA Developments Ltd will pay the compensation’.

As previously reported on Fly2Let, the Greek Cypriot authorities have been getting increasingly vocal about the position of people who buy property effectively confiscated when the island was divided and have been using their EU membership to press claims with court action in other countries. Many see this as closely related to its pressure to have the island reunited and the illegal Turkish Republic of Northern Cyprus dismantled. The Armaranta development was of such a size and economic importance to the north of the island that it was hardly likely to be ignored. And in May the Cypurs Government instigated a European arrest warrant for Gary Robb and four business colleagues for constructing developments on land owned by Greek Cypriots.

As the illegal state is recognised only by Turkey and therefore has no extradition treaties in place, it has become a haven for those wishing to escape prosecution elsewhere. The warrants against Robb, already a fugitive from British justice, and his associates can only be actioned if and when they step outside the Turkish Republic of Northern Cyprus.

However, Rob apparently took the hint that things were getting hot and is reported to have left the island for Thailand. He is believed to have been living in Northern Cyprus since making a courtroom getaway from the UK when on trial for drugs charges following a 1996 raid on his nightclub.

Robb, next attempted to transfer money associated with his property business – some reports say as much as £10m – to a Bangkok bank account. But an intermediary Hong Kong bank became worried about the size of the transfer and alerted the anti-money laundering authorities.

The upshot was that the Northern Cyprus Finance Ministry froze Robb’s assets on the Island along with those of his company AGA, which is variously described as AGA Properties, AGA Construction and AGA Limited, and lawyer his Talat Kursat.

When news of this and Robb’s flight appeared in a local newspaper, accompanied with claims that work on Amaranta Village had been halted, investors descended on the firm, threatening legal action.

Kurstan has since issued a statement denying any wrongdoing, saying the only money being transferred was Robb’s £1.5m share of profits and that investors progress payments were safe. Amaranta Estates, whose offices remain open, is taking the same line, saying that property buyers’ investments are safe and that the building work will resume.

Accession of Cyprus to the EU along with Turkey’s aspirations to join in a future round of enlargement is likely to be behind the Northern Cyprus authorities willingness to crackdown on money laundering. Finance minister Dervish Deniz has confirmed that although ‘not a problem’, it intends to pass new anti-money laundering laws in line with EU directives.

• Government spokesman Kypros Chrysostomides has confirmed that the auction in Britain of Greek Cypriot properties in the occupied areas of the illegal Turkish Republic of Northern Cyprus will be considered ‘an illegal procedure which clearly contradicts the definition of property, as it was recognised by the European Court of Human Rights’.

He said the Government’s campaign on property rights had already yielded results and that ‘this illegal effort to sell property through auctions perhaps seeks to exonerate from a previous illegal action, which, however, is still illegal’.