Issue link: https://maltatoday.uberflip.com/i/1266179
3 maltatoday | SUNDAY • 5 JULY 2020 NEWS CONTINUED FROM PAGE 1 He said he knew the reason it was set up, as well as the owner- ship of the company. MaltaToday was told that po- lice investigators understand that Macbridge is an acronym that stands for 'Malta And Chi- na Bridge', a fact that could tie in into the Muscat administra- tion's deep ties with the Chi- nese on energy matters. Indeed, the Egrant inquiry re- port had brought to light an en- tity that was to be controlled by a secret company in the British Virgin Islands, to run a pub- lic-private partnership called "MACHIN Project" – an en- tity for the promotion of Chi- na-Malta investment. The project was discovered in emails from 2014 between Keith Schembri and Konrad Mizzi, in relation to an email from Cheng Chen of Shanghai Electric Pow- er, which owns a large chunk of Enemalta. In Chen's redacted email cited in the report, he speaks about a meeting with Mizzi, Schem- bri and Nexia BT's boss Brian Tonna "to finalise [a] business model (…) energy-related top- ics, real estate, tourism (…) meeting with Maltese experts to understand the potential as off-shore investment hub for Chinese (…). The plan was to use the MACHIN project as the Maltese government's representative in- vestment promotion agency in China, as well as an emigration agency setup in China. And further communication showed that "the cooperative mechanism shall be set with a certain person named Sai" – possibly Sai Mizzi Liang, Kon- rad Mizzi's wife. Mizzi has pre- viously said that his wife was never approached to work on the discarded proposal. The report identifies Chen as a client of Nexia BT, who is him- self the owner of a BVI compa- ny called Torbridge Services Inc set up by Nexia BT, which had opened a bank account in the shuttered Pilatus Bank. MaltaToday last week re- ported one witness saying that ministers were faced with a catch-22 on what to do with the suggestion that Fenech held the key to greater corruption cas- es, if he was granted a pardon. "The corruption being alleged hit right at the heart of Muscat's administration. At that point, there was no clear idea of what kind of corruption Fenech was alleging and how far it went. Pardoning Fenech days after he had been arrested was unthink- able, and outside the rage in the streets was palpable. To some people inside Cabinet, it would have meant opening a Pando- ra's box to bring down the gov- ernment." The Labour government is still plagued by Joseph Muscat's in- sistence to retain Keith Schem- bri by his side when his chief of staff had to admit knowledge of the secret company 17 Black and Macbridge, as "potential clients" for his business group. He never named the owners, and insisted the Dubai compa- nies never became clients of his business group. Revelations on Macbridge were not mentioned by the po- lice to the cabinet meeting held on 28 November of last year. Fenech's request was made in the presence of his lawyer, the former Commissioner of Po- lice Lawrence Cutajar, deputy Attorney General Philip Galea Farrugia, and police inspectors Keith Arnaud and Keith Zahra. Macbridge was to serve as secret conduit of private funds Yorgen Fenech: the alleged mastermind in the Caruana Galizia assassination had told police he could reveal about the corruption in Electrogas as well as Macbridge CONTINUED FROM PAGE 1 The American healthcare company, which stepped in to buy the mysterious Vitals Global Healthcare in December 2017, is insisting on a new contract that gives them more money to run the three state hospitals – up to €120 million annually, accord- ing to sources – and wider berth on default clauses. The negotiations with Muscat at Castille was to ensure Stew- ard is provided extra finance to be able to continue operations while in Malta. The first major change is that Steward wants to extend its transition period to 31 July 2023. Muscat at the time was also facing threats of resignation of Chris Fearne on the memoran- dum of understanding. But the Maltese government is also exposed to a new kind of risk on the Steward hospitals' concession: information re- ceived by a magistrate carrying out an inquiry into the contro- versial public-private partner- ship, revealed an "escape clause" that would turn any termination of the Steward concession into a government default. In the agreement signed by Mizzi and Steward Healthcare, the government agreed that should the hospitals' concession be terminated by a court of law – for whatever reason, and even if Steward is in breach of con- tract – such an event would be a government default. That would mean that all debts incurred by Steward would be passed on to the government, and the American company would still be liable for a €100 million contractual pay-out for its equity. The agreement is part of a loan guarantee for a €28 million Bank of Valletta loan to Steward and its subsidiaries. Apart from placing the hospital lands under Steward's control as guaran- tees for the debt, the agreement gives Steward unprecedented generosity by accepting that should the concession be re- scinded by any law, public or- der or decision, judgement or decree – effectively any govern- ment or court decision – such an event will be "a non-rectifi- able government of Malta event or default". This could imply that the gov- ernment has no wriggle room should Steward be found in breach of the concession by any tribunal: the decision will instantly trigger an obligation on government to pay out €100 million in cold cash, and take on any lenders' debt, such as these BOV loans. But should Steward default on the contract and not fulfil its ob- ligations on the St Luke's, Karin Grech, and Gozo hospitals, it would 'only' lose its equity – the investment it carried out during the PPP – although government would still have to pay the debt they incurred. Together with Muscat, in No- vember 2019 Steward was close to extending the grounds on which a 'force majeure' or na- tional emergency default might incur, that is, situations where civil strife or war would make the operation unworkable. In such case, government would be obliged to pay Steward 50% of its equity, but also cover any debt the company incurred. But Steward wanted to add a host of other such 'force ma- jeure' conditions, such as acci- dental loss or damage, strikes and work-to-rule situations, and even changes in laws such as those affected by EU regula- tions all situations that tend to affect the ordinary running of any business. Sources in the civil service have told MaltaToday that the Boston healthcare company never underwrote any guaran- tee on Steward Malta's commit- ments to deliver on its contract – a situation that could put the company in default. And yet, Steward had pro- posed to Mizzi that it trans- fer its concession on the Barts campus at the Gozo hospital to Medical Properties Trust, one of the American shareholders in Steward Health Care in Boston. MPT, a real estate firm, would then use the transfer to raise funds for Steward Malta, and then 'rent back' the lands con- cession to Steward. mvella@mediatoday.com.mt Steward wants finalisation of agreement brokered with Mizzi, Muscat