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maltatoday, WEDNESDAY, 13 AUGUST 2014 News 6 MATTHEW VELLA MALTESE taxpayers have footed a €210,000 payment to a former owner of the Café Premier, whose former business partner says was a commis- sion representing 5% of the total com- pensation deal, for reaching an agree- ment with the government to buy out the lease for the Valletta café. The government gave the company, Cities Entertainment Ltd, €4.2 mil- lion to vacate the government prop- erty so the government would buy back the 65-year-lease on the Café Premier. But the 'expropriation' amount also included a €210,000 payment for a company owner, who claimed the money as a 'debt' for having reached the deal. MaltaToday has learnt that the deal was reached by Mario Camilleri, as a representative of M&A Investments – a shareholder in Cities Entertain- ment – and architect John Sciber- ras, a former director-general of the Lands Department who was medi- cally 'boarded out' in 2008, but now serves as a consultant at the Office of the Prime Minister. According to a police investigation, it turns out that Cities Entertainment were trying to sell off their govern- ment lease on the market due to busi- ness losses and outstanding rental arrears; but Camilleri reached an agreement with Sciberras to have the government take the premises back and cancel executive letters ordering Cities Entertainment to pay back its arrears. In the agreement, the Lands De- partment accepted to pay €4.2 mil- lion to Cities Entertainment to allow it to pay back all its dues to the State – rent, income tax, utility bills, VAT, even bank loan arrears – but also factored in a €210,000 payment for M&A Investments. The director of the Joint Office, architect Duncan Mifsud, a former Labour candidate in 2008, was en- trusted by Sciberras to establish the price to be paid by the government, using formulae established by law by the previous government. But the government property divi- sion has so far refused a Freedom of Information request by MaltaToday, to present the workings into how it came to the €4.2 million valuation for the Café Premier. It was Cities Entertainment direc- tor Neville Curmi, a well-known stockbroker, who told police in their investigation over an MP's allega- tions of commissions, that Camilleri had taken a commission for the deal. Curmi was said to have protested the €210,000 payment. Camilleri denied to police that this was a com- mission, and said that this had been a debt he claimed for having poured in extra cash into the Café Premier to keep the business going. What is unclear is why the govern- ment paid a sum of money that in- cluded a "commission" – as claimed by Curmi to police investigators – in its compensation for the lease. Piecing together the chronology of events through court, land registry and police reports, MaltaToday has established that an agreement was f o r m a l l y r e a c h e d some time in November 2013 after both Cities Entertain- ment and the Lands Department decided to withdraw civil action over arrears payable on the Café Premier. Cities Entertainment had launched civil proceedings against the Lands Department, after the latter served it with official letters to pay €200,000 in arrears in December 2012. The compensation was then for- mally paid out when the deal was for- mally sealed in January this year. The police investigation identified Sciberras, on a retainer from the Of- fice of the Prime Minister, as having been tasked to evaluate Camilleri's offer. According to their investiga- tion, although Curmi was said to have been unhappy about what he called the commission, he accepted that Camilleri had managed to bring the deal to the table, again rein- forcing the impression that Camilleri and Sciberras had sealed the deal. Michael Farrugia, the then par- liamentary secretary for lands, had told MaltaToday in February that the "amicable expropriation" allowed the overlying National Library to elimi- nate any hazard the catering business could pose to the treasures housed in the Biblioteca, and to build an eleva- tor to improve access. The public deed for the compen- sation specifically outlined what the €4.2 million had to be used for: €307,346 to settle outstanding ar- rears with the government property division and €504,000 in capital gains tax owed on the land; €192,748 to the Inland Revenue Department to settle income tax and social security pay- ments, €227,058 to the VAT Depart- ment on outstanding dues and legal procedures against the company, and €130,963 in energy bills for ARMS; and €3,265 to creditors Golden Har- vest. Additionally, Mario Camilleri's company M&A Investments was paid €210,000, the debt which his former business partner Neville Curmi de- scribed to police investigators as "a commission" for securing the deal. Finally, another €2,560,800 was to be paid to Banif Bank, in four instal- ments, in settlement of the outstand- ing bank loans that Cities Entertain- ment held with the bank. 1998 December 2012 November 2013 June 2013 January 2014 Cities Entertainment enter into 65-year lease with Lands Department: rent payable was of Lm20,000 annually for two years, then revisable every two years to Lm25,000, Lm30,000, Lm35,000, and Lm40,010 (€93,433) by 2007; and then revised by 20% every five years, reaching a total of €16.8 million over 65 years in today's prices. Lands Department, under minister Jason Azzopardi, issues letters of executive title to Cities ordering payment of over €200,000 in rental arrears • Cities initiates court action to contest them After Labour election, both Cities and the Lands Department drop court cases that would have enforced payment of arrears or even recission of 65- year-lease Mario Camilleri, a Cities Entertainment director, reaches a deal with OPM consultant John Sciberras - who until 2008 was head of the Lands Department - to have the government buy out the 65-year lease Police investigate claims of 'illegal' commissions in reaching €4.2 million deal WHO ARE CITIES ENTERTAINMENT LTD? Directors Neville Curmi and Mario Camilleri represented the shareholdering companies: CABELLERO ENTERPRISES and DANETA LTD for Curmi; JAMCO and M&A Investments for Camilleri; and IMPACT Consultancy, whose owner is Joseph Grima Lands Department pays Cities Entertainment €4.2 million - 50% goes back to the State to pay rent, taxes, VAT and utilities; but €2.25 million goes to Banif Bank to repay outstanding loans, and €210,000 goes to M&A Investments, a shareholder in Cities Entertainment, owned in part by Mario Camilleri After MP Jason Azzopardi suggests commissions were paid to reach the deal, a police investigation is ordered. Police claim no commissions were paid, but in their investigation, Cities Entertainment director Neville Curmi claims the €210,000 'debt' to M&A Investments was a commission for Mario Camilleri for having reached a deal with the government MaltaToday files Freedom of Information request for workings carried out by Joint Office director Duncan Mifsud, but GPD refuses. MaltaToday apeals the decision with the IDPC July 2014 March 2014 TIMELINE • CAFÉ PREMIER Café Premier changes ownership: Michael Bianchi, Joe A. Grima and Michael Zammit Tabone (all of whom will later resign) pay out café's former tenants, among them Joe Pace of former Magic Kiosk in Sliema – Lm850,000 (€1.98 million), in goodwill and for improvements Taxpayers footed €210,000 'commission' for Café Premier Delimara unit trips, fire at Marsa distribution centre MIRIAM DALLI A fault at one of the generating units at the Delimara power station and a subsequent explosion at the Marsa distribution centre resulted in a widespread power cut across Malta and Gozo. Power was restored in most of the country just after midnight after a four-hour outage. Police, Civil Protection Depart- ment and Enemalta Fire Section per- sonnel, along with other Enemalta workers managed to extinguish the flames and contain the risk of fur- ther damages to the equipment at the largest distribution centre in the south by 11pm. Enemalta said that the company and the Police launched an inquiry over the incident. Enemalta confirmed that no inju- ries were reported as a result of the fire at the distribution centre, next door to the Coca-Cola plant. A number of residents close to Marsa reported hearing an explo- sion. Enemalta said the extent of the damages caused by the fire is as yet unclear. The company confirmed that a fault occurred at one its generating units at the Delimara power station at approximately 7.50pm when one of its units tripped causing a disruption of supply from all the other units. Enemalta's electricity generation and distributions sections started working to gradually restore supply to most areas just before 9pm. However, during the switching op- eration to re-energise all localities, at around 10:45pm, supply to all areas was temporarily interrupted again. However, it immediately started be- ing restored. In an attempt to overcome the heat and boredom, people flocked to bars and cafeterias with an independent power supply. The power cut also caused mobile network problems, with several reporting problems with their internet connection and telephone and mobile lines. Civil Protection Department and Enemalta personnel controlled the flames at the distribution centre in Marsa

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