The Municipality of Strovolos has publicly attributed responsibility to former mayor and far-right ELAM parliamentary candidate Andreas Papacharalambous over the handling of unpaid business debts exceeding €2 million, igniting a heated political and institutional dispute with significant local and national implications.

In an official statement, the municipality said that upon assuming office, the new Municipal Council discovered that previous negotiations and arrangements with a businessman operating in Strovolos had been conducted without the approval of the then Municipal Council. Crucially, despite these talks, the debt not only failed to decrease but actually increased, according to the municipality.

The issue was first discussed at Municipal Council level on 8 October 2024, shortly after the matter came to the attention of the current mayor, Stavros Stavrinidis. Council members were informed that the arrangements made during the previous administration had never received formal approval.

The controversy escalated following reports in the newspaper Alithia, which alleged that during Mr Papacharalambous’ mayoral term, the municipality formally waived its priority over banks for the collection of multimillion-euro debts from a private company. The publication claimed this was a conscious administrative decision, taken with full knowledge of its consequences and without any legal obligation to do so.

The municipality stressed that it is now taking all appropriate legal and administrative actions to recover the outstanding amounts, underlining that the protection of Strovolos residents’ interests remains its top priority.

In a strongly worded personal statement, Mr Papacharalambous rejected the allegations, describing them as an “orchestrated attempt to tarnish my name with slander and lies”, targeting both Alithia and the current mayor.

He argued that the case involved a company undergoing debt restructuring, which was unable at the time to meet its obligations to the municipality. According to his account, had the restructuring failed, the company would have collapsed, resulting in the permanent loss of all debts owed to the municipality since 2002, as well as future revenue.

Mr Papacharalambous stated that the municipality temporarily lifted a memo on 15 January 2020 and reinstated it two days later to facilitate the transfer of loans to another bank. As part of the arrangement, he said, the company paid €200,000, with a repayment plan agreed for the remaining balance.

He also disputed claims that the municipality never received the money, insisting that the €200,000 cheque dated 16 January 2020 was cashed on 22 January 2020.

Responding to claims that the municipality lost its priority as a creditor, Mr Papacharalambous maintained that no priority was ever forfeited, as the municipality’s charge was registered after the bank’s initial mortgage. He added that the decision allowed the company to continue operating, safeguarding dozens of jobs in Strovolos.

“Not a single cent was written off, and the municipality suffered no damage whatsoever,” he said, insisting that all actions were taken transparently, with documented correspondence and in the presence of municipal officials.

Now a parliamentary candidate with ELAM, Mr Papacharalambous accused his critics of political opportunism and confirmed that he has instructed his lawyers to pursue legal action over what he described as defamatory reporting.