Cyprus risks USD 80 mln capital flight

Melkonian students protest as US group announces closure

Financial Mirror
Wednesday, March 17, 2004
(Front page, lead story)

Over 200 students of the historic Melkonian school in Nicosia
demonstrated Tuesday against its impending closure after the
U.S.-based foundation that runs the Institute announced it will close
the school in June 2005, after over seven decades.

News of the closure has angered critics who say that profits from the
USD 80 mln sale of the school’s prime assets will be whisked out of
Cyprus.

Protesting students blocked the main road leading out of the capital,
chanting “Melkonian not for sale” and brandishing placards condemning
the foundation. They suggested this was a “second genocide”.

The school was established in 1926 by two Armenian brothers to provide
shelter to orphans that escaped genocide at the hands of the Ottomans
during the First World War.

The Armenian General Benevolent Union (AGBU), based in New York, which
has been entrusted with the management of the Melkonian since the late
1920s, has decided to close the historic school in 16 months’ time,
without giving sufficient justification for its action.

In a press release issued in New York, the AGBU said that “after
extensive deliberations and thorough assessment”, its Central Board
has resolved unanimously to discontinue MEI in June 2005. This
decision is based largely on the Board’s conclusion that MEI “no
longer meets the challenges of its mission in the present context of
the Armenian world.”

The decision is hotly challenged by the worldwide Melkonian Alumni,
all Armenian Diaspora organisations, with the Cyprus Alumni resorting
to all means to overturn the decision.

The Cyprus government, all political parties and leading Greek Cypriot
personalities support the efforts of the Armenian community to keep
the Melkonian open, since they consider the Melkonian as part of the
national heritage and culture of the island.

Last month, the cabinet, headed by President Tassos Papadopoulos,
allocated an additional aid package towards efforts to keep the
Melkonian in Cyprus, in a development which will further embarrass the
US-based organisation, that until recently insisted that the Melkonian
was not for sale.

Alumni representatives say the core issue is the prime land on which
the Melkonian is located and the intention of AGBU NY to sell the land
and whisk up to USD 80 mln out of Cyprus, which it will use for
unspecified purposes. They said that it also violates the provisions
of the will, made by the Melkonian brothers, who established the
school in 1926 initially as an orphanage for children surviving the
Genocide.

The Alumni have sought legal advice from law firms in Cyprus and
abroad and intend to incorporate international expertise to strengthen
its defence as it moves to contest the decision and block the sale
plans in courts.

“It is not just a matter of the sale of the land and the flight of
some 80 million dollars to the U.S., but also abuse of the rights of
Armenian children who are being deprived of their human right to a
fair education based on their cultural heritage,” says the Alumni.

The local Armenian community plans a mass demonstration next week, in
front of the Melkonian to show its disgust at the decision and to
raise awareness among the Cypriot population to ignore a press
marketing campaign employed by the US-based organisation in order to
win support.

Copyright © Financial Mirror 2004