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Going through the accounts of EAC has raised questions

A retired accountant in Maroni has pored over reports of the EAC and is trying to get to the bottom of why they seem fishy. THEO PANAYIDES meets him

“Dear Mr. Thrassou,” reads Brian Lait’s letter of March 29, addressed to Haris Thrassou, Chairman of the Electricity Authority of Cyprus (EAC). “I attach a copy of a report I prepared, following an analysis of five years of EAC’s Annual Reports to the year 2010…”

The last time Brian stuck his nose in the workings of an electricity company, he almost got himself killed. That was in Aden in the mid 60s, when he was around 25 (he’s now 72); the place was in turmoil, caught up in the insurgency against British rule. “The electricity bills weren’t being paid,” explains Brian in his crisp, deliberate way, “because the guys couldn’t get out to read the meters, because of the terrorist situation going on. There were two bunches of terrorists who were anti-British but they were also anti-each other, and used to fight each other more than they fought us. So people stopped paying their bills.

“So the electricity company said: ‘What the heck do we do?’ And I said: ‘Well, you’ve got the grid system, [so] cut the electricity off. Say, pay your bills or you don’t get electricity’. This was in a confidential meeting, but unfortunately it was mentioned outside – and that’s why my car was booby-trapped, because I came up with this nutty idea!” One morning, as he got in his Alfa Romeo, he noticed the sunlight glinting off something: a ballpoint pen packed with explosives had been wedged under the accelerator pedal, ready to explode – and blow his leg off – when he stepped on the pedal. Then, not once but twice in the next few weeks, he found hand-grenades tied to the bumper, attached to a barbed-wire fence next to the car so he’d pull the pin out as he drove off. By that time, however, his guard was up, and he spotted the grenades before they could do any harm.

His dealings with the EAC haven’t come to that (at least not yet). Still, it’s likely that his “nutty ideas” have once again caused some consternation. It all started when Brian, browsing the web on his computer in the village of Maroni, discovered that the EAC’s Annual Reports for the five years to 2010 were available online – so, as an accountant (or retired accountant), he decided to peruse them. 

Why? Was he just a bored expat with nothing better to do?

He laughs out loud, his square fleshy face twinkling briefly. “Good question,” he acknowledges, then shakes his head: “No, I can find other things to do. But it’s of interest,” he explains. “Because I know how to do it. And, you know, it’s like anything else. If you retire from being a mechanic, do you put your car in for servicing? No, you fiddle around with the engine! It’s the old thing, that’s your training. Pick up a set of accounts and you say ‘we’ll read this, this is interesting’. And you carry on from there.”

What he found in the company’s accounts troubled him: “It looked,” he says carefully, “as if there was something seriously wrong with the way they operated”. Payroll was one problem: “if you take the salaries, pension contributions and everything else, it averages to over €50,000 a year per employee,” he reports. Financing was another problem, given that the company owes around €700 million in loans, repaid at an average of 30 million a year (meaning they’ll be repaying for the next 20 years even if they stopped borrowing right now). But the biggest problem by far was the cost of oil (i.e. fuel), which – as the EAC itself admits – is a major reason why electricity rates are so high in Cyprus.

Taming this cost is clearly vital – yet, says Brian, “they’re not buying oil through brokerage in advance when the prices are low, they appear to be paying any old price.” Suppliers are apparently selected on 14-month contracts, awarded through international bids. “My question, still, is ‘Why?’,” he pursues. “You’ve got 1.2 million tons of oil a year. Why aren’t you dealing through brokers?”

Well, I speculate, maybe there are legal safeguards holding them back. Or maybe it would just be too cumbersome to keep checking price fluctuations and deal with brokers accordingly. Anything to do with semi-governmental organisations is bound to involve loads of paperwork.

“There may be good reasons,” he agrees. “I’m not an oil expert – but what’s the process? I’m just saying ‘Tell me’. All that Stylianou has said is ‘We don’t do it’. That’s it. Full stop”.

‘Stylianou’ is Stelios Stylianou, the EAC’s General Manager. To its credit, the company replied to Brian’s letter, albeit predictably rejecting his analysis and calling his report “over-simplistic”. Brian, in turn, sent a follow-up letter three weeks ago (he’s also corresponded with the European Investment Bank, seeking more information). So far, there’s been no response to his second letter.

Does he feel that he’s being fobbed off?

“I don’t think I’m getting the answers I should get,” he replies, choosing his words carefully. “I mean after all, if a serious error has been made – I’ll call it an error – in not buying fuel in advance when the prices are low – and, as I say, I’m not sure how you go about this – then say so! And then do something about it. Because if you’re not saying so, and you’re not explaining why you can’t do it, and it’s not being done, then the mind – my audit mind – says ‘What else is involved here?’.” 

Brian Lait’s “audit mind” isn’t hard to spot. It’s there in the splendidly detailed directions he sends me on how to get to Maroni (“You pass buildings on both sides of the road. On the left is the Co-Op bank and a standard yellow post box”) and it’s there when I finally arrive, finding the house down a narrow street with birds perched on telephone wires and the usual profusion of palm trees and bougainvillea. Brian himself looks younger than his years, maybe because his hair isn’t white, just grey at the temples. We sit in the courtyard; his wife Sue sits painting in the shade of the first-floor balcony (Brian’s own hobby is photography). There’s no ‘How was your trip?’ or ‘Did you find the house all right?’ – maybe because my trip was obviously fine, and I obviously did find the house; the audit mind doesn’t waste time on small talk. He does however comment on my digital tape recorder, looking like he’s about to take it apart to see how it works.

There’s a striking practicality in Brian’s makeup. He deals in facts, and (like any good accountant) in numbers. “Between us we do – let me see – about 20,000 kilometres a year,” he says at one point, to illustrate that he and Sue do a lot of driving because of Maroni’s location. He retired 11 years ago, and chose his retirement home based on two factors: good climate and cost of living. The big advantage of Cyprus seems to be its tax regime, specifically the low property tax; he only pays around €150 a year for the house, he says approvingly (by way of comparison, he keeps a flat in Cheltenham that costs £1,200 a year, plus a minimum of £75 a month for water). He and Sue could’ve gone to Spain for their retirement, having spent 10 years in Barcelona (their son was born there) – but prices ballooned after the Olympics, so they decided against it. The fact that Spanish culture and Cyprus village culture are quite different doesn’t really seem to have been a factor.

Maybe it’s because Brian is a lifelong expat, a man who’s always lived in ‘foreign’ countries. “I just can’t relate to the UK particularly,” he explains, almost apologetically. He went to school there, and spent a few years there in the 90s, but otherwise he’s always lived abroad – from his birth in Singapore to retirement in Cyprus, via a career in accountancy (for Deloitte, then KPMG) that took in Aden, Ethiopia, Djibouti, Italy, Spain, Belgium, Hong Kong, Romania and Ukraine.

How did he adapt to all those places? “I’m pretty easy-going,” he replies vaguely – but what he means, I suspect, is that he adapted through the “audit mind”, treating each new country with practical detachment. Why, after all, do some people find it hard to live like he did? “I would love to know,” he says candidly. “I guess some people just feel much stronger roots than I do”. Even his career – accountancy itself – was chosen for practical reasons, because he could qualify in eight years (Medicine, his first love, needed 10) and because a professional qualification was essential to work abroad, especially in the Third World. You might say Brian Lait has lived his whole life with an auditor’s unsentimental objectivity, his only roots being in logic and good governance.

There’s an upside to this, because it means he can write a report on the EAC and feel objective. “I’m sort of detached,” he explains, “in the sense [of] ‘Oh, here’s another company that I’ve analysed’. I must’ve done hundreds of them in my life”. But there’s also a downside – because it means his report on the EAC may be ignored, even resented. He has no roots in Cyprus, hadn’t even visited till two years before retirement. He speaks very little Greek, even after 11 years. Does he think he might be viewed with suspicion, as a meddling foreigner? “I don’t think there’s any doubt about that,” he replies, then pauses slyly: “You gave us the word ‘xenophobia’…” What makes him so sure? “I just sort of feel it,” he shrugs. “Maybe I’m anticipating it, to a certain extent.”

Does it matter? Does Brian matter, with his earnest letters and his DIY report hammered out in a small house in Maroni? On the one hand, there may be something fishy in what he’s uncovered, especially given the EAC’s reluctance to explain its methods. “But I don’t know that,” he admits – then stops, and sniffs the air like a hunting dog: “I smell it. That’s experience. The figures don’t look right. The whole thing doesn’t look right”. Then again, he might simply have stumbled on one of the less attractive features of Cypriot society – that when someone makes a mistake, and you point it out to them, they’d sooner die than admit it.

“I wouldn’t say anything really earth-shattering has [ever] happened in my life,” says Brian Lait mildly, sitting in his shaded courtyard with the birds chirping outside. Yet there’s something quite important in his case, thorny questions of transparency and large organisations being accountable to the little man. “It worries me, to a certain –” he begins, then pauses: “Well, ‘worry’ is not quite the word, it disappoints me to a certain extent that there isn’t sufficient recourse, I think, for the man in the street to complain, or have his voice heard”. His own position is clear. “EAC, look! I’m standing outside you. I’ve got these questions. Please answer them. They’re logical”. The audit mind demands nothing less.