Uclan Cyprus developers face €46 million ‘unpaid debt’ claim

The University of Central Lancashire’s Cyprus campus is at the centre of a legal row, with the Cyprus state telecoms company’s pension fund claiming it is owed €46 million (£40.3 million) in unpaid debts after putting money into construction of the campus.

Uclan Cyprus began life by attracting the ire of the United Nations secretary general when it was built in the buffer zone between the island’s Greek Cypriot and Turkish Cypriot communities.

It is now the focus of further controversy, in a legal dispute between the pension fund of Cyta, the state telecoms company, which provided money for campus construction, and the Cypriot developers of the campus.

Times Higher Education has previously reported that Uclan Cyprus is operated under a joint venture between Uclan and a group connected with a Cypriot property developer, Hassapis Group, with that joint venture leasing the buildings from the campus developer.

Papers from the Larnaca District Court in Cyprus now detail a case involving a company owned by the developers, FG Lancashire Accommodation Limited.

The directors of FG Lancashire Accommodation are listed, in Cyprus Corporate Registry entries, as Giorgos Hassapis and Floros Voniatis.

In the court papers, Cyta’s pension fund says it is owed “an amount of €46,055,931.46” and that “pursuant to a financing agreement” agreed in 2012 “this debt has been admitted, a demand was made under the law and the debt was not settled”.

The pension fund says that companies linked to the campus developer were provided with €24.9 million. With this money “land would be purchased on which university facilities and student and other residences would be built” and, after payment of rents, in return the pension fund “would receive an amount of €44,969,322”, according to the case.

The obligation to repay was shared between two companies and any amounts outstanding after November each year would be subject to interest, it says.

But instead, “the total amount of €1,750,000 was paid on various dates”, the pension fund claims.

The court paper says that the defendant disputes part of the debt “and claims that it is an amount of concealed illegal interest”.

According to the papers, Mr Hassapis disputes the identities of the companies involved in the financing agreement and says a demand notice was not properly served.

THE asked Uclan what impact, if any, the court case would have on the operations of Uclan Cyprus.

A Uclan spokeswoman said: “We are aware of the ongoing legal proceedings in Cyprus and are unable to comment at this point.”

Hassapis Group could not be contacted for comment.

In 2014, THE reported that Cyprus’ auditor general had “concerns” over the investment in Uclan Cyprus by Cyta’s pension fund, which was then at the centre of a trial over alleged kickbacks and corruption in a separate land deal.

There is no suggestion of any connection between those claims and the current legal case.

john.morgan@timeshighereducation.com