Philotheou Monastery’s Battle for the Underground Parking Lot at the Square Mall (Translated from Greek newspaper articles)

The underground car park in the “Square” shopping mall on King Heraklion 38.
The underground car park in the “Square” shopping mall on King Heraklion 38.

NOTE: The abbot of Filotheou, Geronda Nikodemos, is a spiritual child of Geronda Ephraim in Arizona, and still under obedience to him. Technically, the role of an abbot or abbess in Geronda Ephraim’s family is one of “ambassador.” Though they run the monastery, it still belongs to Geronda Ephraim and is under his direction, since the abbots and abbesses are under obedience to him. Geronda Ephraim has the final say in all things and he can override his abbots and abbesses in anything. As a rule, any big project or undertaking usually needs a blessing first. Or, if the abbot or abbess has free reign in certain areas and don’t need to ask permission, by right they would still ask Geronda Ephraim to bless the project to go smoothly. Thus, an undertaking like this business deal would either need permission first, or the Geronda would have been asked to bless it.

Since July 30th, with the assistance of police forces, the operation of the parking garage passed back to the company “Movement ATE” (Κίνηση ΑΤΕ), which had been expelled badly in 2007, when the property had passed to the ownership of Filotheou Monastery.

A long cycle of litigation concerning the operation of the underground car park in the “Square” shopping mall on King Heraklion 38 ended with the Nos. 12378/2014 decision of the First Instance Court of Thessaloniki, which was released on July 7, 2014.

The First Instance Court, just like many previous first-instance judgments and Court of Appeal decisions, the Council of State and the Supreme Court upheld the company ‘Movement ATE’(Κίνηση ΑΤΕ), ordering the delivery of the parking lot to this company, which was the lawful tenant until its forcible eviction from the lot in 2007. Indeed, the First Instance Court held the decision provisionally enforceable.

However, the parking lot managers, as well as the Monastery’s representatives, refused to comply with the judgment. Thus, the police and prosecutor’s assistance was needed in order to deliver the space to the new administrator. Indeed, according to the information, the previous managers resigned, removing important parts of the mechanical equipment (electronic fences, screens, fire extinguishers, etc.) worth hundreds of thousands of Euros, which the “Movement ATE” (Κίνηση ΑΤΕ) had paid for during its first installing.

The underground car park in the “Square” shopping mall on King Heraklion 38.
The underground car park in the “Square” shopping mall on King Heraklion 38.

The Background

  • In 1998, the construction of the four-storey underground parking lot, with a 424 spot capacity, was completed by the construction company “GEKA SA (ΓΕΚΑ Α.Ε.)”, which was also the owner.
  • On August 10th, 1998, “GEKA SA (ΓΕΚΑ Α.Ε.)” commissioned “the administration and management of revenue and expenditure” of the lot to Erophile Pantelidou through a private agreement. As noted in the First Instance Court’s judgment, as well as many previous court decisions, “the contract between ‘GEKA SA (ΓΕΚΑ Α.Ε.)’ and Erofili Pantelidou is characterized as a management delegation agreement, operational organization and management of revenue and expenditure of the parking lot in effect only, while in essence it was also operated as the lease of a profitable thing.” In short, while in the private contract Mrs Pantelidou seemed to be simply a parking lot manager, which the owner operated, i.e. ‘GEKA SA (ΓΕΚΑ Α.Ε.),’ in reality Mrs. Pantelidou was the parking lot manager to which the ‘GEKA SE (ΓΕΚΑ Α.Ε.)’ was the owner and hirer. This occurred because the ‘GEKA SA (ΓΕΚΑ Α.Ε.)’ should be shown as operating this parking garage, for it had built using a government grant and interest subsidy. Under n. 1892/1990, the subsidized ‘GEKA SA (ΓΕΚΑ Α.Ε.)’ was forbidden to sell or lease the parking lot, otherwise it would have to return the grant money. So instead of “leasing” it, as it was in reality and all the courts finally decided, the annulment of its ‘concession management’ was chosen.
  • Approximately three years later, on November 1, 2001, the company “Movement ATE (Κίνηση ΑΤΕ)”, with whom the “GEKA SA (ΓΕΚΑ Α.Ε.)” signed a new private agreement, appearing once again as a “management contract of the lot” and not a “leasing” as it was in reality, crept to the rights and obligations of Mrs. Pantelidou
  • On March 31, 2005 “GEKA SA (ΓΕΚΑ Α.Ε.)” sold the parking lot to Filotheou Monastery. Indeed, in order to buy the parking lot, Filotheou Monastery took out a loan at a very large state bank for € 19.1 million. The repayment period of the loan is 15 years, while the interest rate is very privileged, as it was based on the euribor plus 1.55%. The assessed value of the property was € 1.8 million. The bank estimated the market value of close to € 25 million, while finally in the purchase contract the amount of € 18.5 million was given as a selling price.
  • In the purchase contract, the private agreement with “Movement ATE” (Κίνηση ΑΤΕ) for the concession management of the parking lot, essentially of the lease, is also mentioned. However, the new owner ignored this private agreement and proceeded to a new lease of the parking lot to another company, “Exploitation Garages, Parking Square” (M. Ltd [Μ. ΕΠΕ].). Indeed, M. Ltd (Μ. ΕΠΕ) was established one days after the purchase of the parking garage by Filotheou Monastery and the trader A.M. appears as the owner and sole. At that time, A.M. was both the sole legal manager of all the assets of Filotheou Philotheou.

Public Losses

From that point, a judicial marathon with many intermediate stations started. This led to the final and conclusive vindication of the company “Movement ATE (Κίνηση ΑΤΕ).” This companywonall courts of the first, second and highest degree, returning to the management of the property and continuing its operation as a parking lot since the end of July.

Beyond theperennialconflictbetweenFilotheou Monasteryandthe company “Movement ATE”, the case of parking lot also presents interest to the Greek government.

It specifically remains to investigate the potential loss of tax revenue of millions of Euros over the past seven years, during which Filotheou Monastery had leased the parking to M. LTD (Μ. ΕΠΕ). This arises from some special and unusual conditions of the lease, which almost eliminates the profits of M.Ltd. (Μ. ΕΠΕ), as approximately 90% of its turnover seemed to be paid as rent to Filotheou Monastery.

Therefore all the years Filotheou Monastery did not own the parking garage (1998-2005), the Greek government collected infinitesimal tax revenue from its operation of the parking garage;the income tax amounted to about € 500,000 per year. http://www.makthes.gr/news/reportage/81892/

Source: Makedonia

Excerpt from another article: The Curious Paths of Money

Car companies, “entrepreneurs” that appear suddenly in business rank and then disappear, uncharted money routes, millions of Euros of which the traces are lost, and undeclared income are only some of the pieces of this peculiar puzzle, which, if competent tax authorities ever attempted to assemble it, they would certainly be surprised. Further examples of only some pieces of the puzzle are given:

  • Immediately after the purchase of the parking lot, the single person M.EPE is recommended, to whom Filotheou Monastery assigns the operation of the parking lot. The sole shareholder of M.EPE is the legal manager of all Filotheou Monastery’s assets; a trader that has a store on Giannitson road. The company’s share capital amounts to € 18,000, which is divided into 180 shares, all owned by the sole member.
  • Four years later, namely on January 16, 2009, a company under the name “ODOS SA” is introduced. It is seemingly unrelated both to M.EPE, and to the Filotheou Monastery. The share capital was € 60,000 and its chair was on Mackenzie King, in the same building which M.EPE was located; a building which belonged to the Filotheou Monastery! The unique partners of “ODOS SA” are A.Z., which is president and CEO of the company and holds 5,820 shares, and CH.X., holder of the remaining 180 shares.
  • Nearly 40 days after its creation, namely on February 13, 2009, the “ODOS SA” proceeds to acquire M.EPE at the cost of about € 132,000.
  • However, on February 17, the two partners of “ODOS SA” “have sold under private contract all the shares minus one to Filotheou Monastery! In short, within this labyrinthine buying and selling, the owner and operator of the parking garage at the mall is the same legal person, Filotheou Monastery. * The one share of “ODOS SA”, share No. 6000, which was given to Filotheou Monastery was sold—it is unknown for what reason—to a member of the famous business family of Thessaloniki. In recent years, Filotheou Monastery has concluded several strange property transactions with share No. 6000.

Philotheou real estate with 67 properties!

Apart from the parking garage in the “Square” shopping mall, Filotheou Monastery has 66 other properties in the center of Thessaloniki. The majority are shops, apartments and offices. Specifically properties are in use on Egnatia (22 offices and six branches), on the Mackenzie King (whole eight-storey building), on Valaoritou (six stores and 1,250 sqm in floor which rents the IKA for over € 190,000 per year). The monastery also has properties (shops, apartments, offices, fields) in other regions of the country (Thassos, Xanthi, Larissa etc.).

Filotheou Monastery’s 2009 revenues from the above properties in Thessaloniki was € 2,255,706, which, as shown in the tax return that “Θ” published, was exempt from taxation. The only thing the government received was the stamp (69,476,70) and a contribution for OGA (13.895.34), or a total of € 83,372.04, which was essentially paid by the tenants, in addition to rent. http://www.makthes.gr/news/reportage/81892/

The underground car park in the “Square” shopping mall on King Heraklion 38.
The underground car park in the “Square” shopping mall on King Heraklion 38.