Issue link: https://maltatoday.uberflip.com/i/1189756
5.12.19 12 OPINION George Mangion I t is no wonder that the Institute of Ac- countants (with 3600 qualified mem- bers) cautioned that the circumstanc- es prevailing within the country are so extraordinary and grave that immediate actions are needed to restore serenity and confidence in our marketplace. e Institute inter alia, demanded im- mediate changes in the executive arm running the country and those leading the relevant institutions. It harks that incumbents occupying executive po- litical roles (somewhat associated with the prevailing uncertainty) should make way now to avoid further reputational damage for Malta and above all to car- ry political responsibility. e Institute said it had been let down by the certain elements within government and the institutions. ese are strong words from an in- stitute whose members constitute the building blocks of diligent audit and business advisory services to the en- tire business community (including top government agencies). e profession for many years guided its members to maintain good govern- ance and a high level of professionalism. No, it is not business as usual as some apologists are saying. e first tremor in business failure was the recent announcement by the Tumas group that talks with the Midi Group to transform Manoel Island into a top-end multimillion joint project had been dropped. e developer had faced strong public disapproval during its ap- plication for building permit yet one cannot overturn a 99-year concession. e controversy was accentuated by the developer wanting - and obtaining - approval for the building of a casino and a hotel at the historic 16th century Lazaretto, apart from erecting various apartment blocks, retail outlets, a yacht marina, helipad and public plazas. It was only last year that news came out that the affluent Tumas group (own- ers of Portomaso among other massive developments ) has started talks with MIDI to buy a majority share in the Ma- noel Island project estimated at €100 million. e public at large did not have to hold its breath fearing the project will lapse since MIDI quickly announced that it is fully committed to start its dream project once planning permits are processed. It is obvious for bond holders to ask- what made the Tumas group shy away from such a profitable and prestigious investment ? e answer came last week when Tumas group former CEO Yorgen Fenech was intercepted by the Armed Forces out at sea leaving Portomaso in his luxury yacht. He was arrested and later charged with complicity in the murder of journalist Daphne Caruana Galizia. e Tumas group is a shareholder to- gether with Gasan Group in a €450 mil- lion Electrogas utility together with an Azeri company and Siemens. ere is also a joint project between the Tumas and Gasan Group named e Quad which is being developed to provide upmarket business complex spread 4 towers ranging from 13 to 19 floors. One hopes that the Electrogas saga will not impinge on the building of e Quad as this will surely exacerbate the tension in the construction sector and hit employment prospects of the country. Back to the Electrogas consortium, the saga unfolded when the murdered journalist had just started to investigate a cache of documents leaked to her on Electrogas's internal governance. She discovered that an offshore company with the name 17 Black entered into a pact to pay substantial sums to two secret Panama companies registered (shortly after 2013 election ) by Nexia BT as personal advisers to the Energy minister and the Chief of Staff. An independent consortium had later investigated the scene revealed that 17 Black offshore company belongs to Yor- gan Fenech-he never denied it. A whis- tle-blower who was given a presidential pardon has named Jurgen as one of the masterminds in the murder plot. e anger by the electorate learning that allegations of impropriety were hinted to touch the top executive class of government, resulted in unprece- dented business uncertainty and unit- ed the nation to demand closure of the murder investigations which dragged over two years. e public is insisting that following the abrupt resignation of two cabinet ministers and the Chief of Staff last week, caused high tension in the coun- try. e crowds now demand the prime minister to step down immediately and take political responsibility. Another official statement was issued by GRTU (the union for SME's) urging a quick settlement to calm the acute business tension. ey simply said it cannot wait any- more; the economy and domestic mar- ket dictate urgent closure of the murder investigations saying any conflicts of interest, actual or perceived, must not impact the process or outcome of the investigations. e GRTU called for greater political responsibility and immediate solutions to the grave problems at hand. eir statement continued saying that "Pro- crastination will only lead to more dam- age. e longer we take to turn the page, the longer it will take us to get back on our feet. As an official representative of a main strata in society GRTU feel obliged to protect our social and eco- nomic segments. In the meantime, Tumas Group quick- ly dissociated itself from claims that it benefited from corruption alleged in the Electrogas scandal, and immedi- ately announced that it was seeking an independent, external report to ascer- tain whether it had benefited in any way from the illicit activities being attribut- ed to its former director, Yorgen Fenech. is week, Tumas Investments bonds suffered a 7% drop. To conclude, one cannot but mention the plea for caution issued by the Chamber of Commerce and Industry. It said that it disassociat- ed itself from those who use business as a shield for criminal activity. "is does a great disservice to the country and irreparable damage to the business community. We remain advo- cates of ethical business and hope that the forces of law and order will be em- powered to investigate and take legal action against all forms of criminal ac- tivity that tarnishes our reputation. We also hope that politicians will safeguard ethical business and adopt a no toler- ance approach to impropriety in future." It looks like Christmas is coming late this year. Withdrawal of Manoel Island deal may be the first casualty George Mangion is a senior partner of an audit and consultancy firm, and has over 25 years experience in accounting, taxation, financial and consultancy services. His efforts have seen PKF being instrumental in establishing many companies in Malta and ensured PKF become one of the foremost professional financial service providers on the Island Proposed apartment blocks at Manoel Island