Issue link: https://maltatoday.uberflip.com/i/433160
maltatoday, SUNDAY, 14 DECEMBER 2014 4 News CONTINUED FORM PAGE 1 Cathy Farru- gia's secretive invoicing was discov- ered by her husband's brothers – the rest of the John's Group shareholders who later kicked out George Farrugia – accidentally, because she had used the same computer and word proc- essor from the company's offices to issue Aikon's invoicing. She even negligently corresponded with oil companies Trafigura and Totsa and referred to the two batch- es of invoicing – one for Power Plan and the other for Aikon – in the same emails, and signed as Cathy Farrugia for Power Plan. Aikon was set up in 2002 and oper- ated until 2010 without the Farrugia brothers' knowledge. MaltaToday has documents in hand showing that Cathy Farrugia was responsible for invoices issued behind the back of George Farrugia's brothers. Michael Cassar, now appointed Commissioner of Police following the resignation of acting commis- sioner Ray Zammit, confirmed on Friday that George Farrugia's broth- ers would be prosecuted on charges related to the oil scandal – allegedly for having known of the bribery net- work employed by George Farrugia. However, it was a court action they brought against George Farrugia that produced a cache of incriminat- ing emails and invoices that showed the extent of Farrugia's operations in Aikon and his Trafigura dealings. The Farrugia brothers were arrest- ed in March 2013, shortly before the general election, but never arraigned. Well known for their Nationalist sympathies, the John's Group firm had started legal proceedings against their brother George over suspicions that he had skimmed off over €6 mil- lion in profits for Power Plan, into his own personal company Aikon. The charges were issued by In- spector Jonathan Ferris in 2013 at a time when the home affairs minister was Manuel Mallia; but they were 'reopened' in the last week while the police was under pressure over the Sheehan shooting inquiry. Former police inspector Angelo Gafà also recently told parliament's Public Accounts Committee that he had intended prosecuting the broth- ers before he was reassigned to the Security Service in June 2013. He said he was waiting for some bank documents before pushing ahead but confirmed that the deci- sion had been taken. Opposition leader Simon Busuttil has stated in parliament that the po- lice had not prosecuted the Farrugia brothers because Manuel Mallia had been the firm's legal advisor. But it was the Farrugia brothers who had in fact alerted Prime Minis- ter Lawrence Gonzi to the case some time in 2011, by giving a cache of Aikon invoices to the prime minis- ter's Security Service detail. Gonzi reportedly told the MSS of- ficer to report the allegation to the Commissioner of Police, without taking any further ownership of the matter. The security officer relayed the in- formation to his superior, Malta Se- curity Services head Godfrey Sciclu- na, who on his part communicated the matter to a high-level official in investments minister Austin Gatt's secretariat. An investigation into the irregu- larities was never held by the MSS or the Police: instead, the cache of papers was decimated – ostensibly shredded – and instead passed on to the finance ministry, which in turn passed on the matter to the Tax Compliance Unit to investigate. This week in parliament, educa- tion minister Evarist Bartolo told the House that Gonzi's bodyguard took the invoices and emails that Farru- gia had sent to the MSS head in May 2011. He said: "This file contained a cache of documents sent to the TCU and a series of emails; contact was made with a minister's official and the emails were shredded. This was how the Security Service was used to destroy information. "The initials of the two persons involved in this matter are R.S. and B.P.," Bartolo alleged. The Finance Ministry launched an investigation in 2011 after receiving a tip-off that George Farrugia was committing serious tax fraud. The file with documented evidence was passed on to the Finance Min- istry indicating rampant tax fraud at Aikon. The file was forwarded for investigation to the Tax Compliance Unit on August 25, 2011. Person who could hold key to secretive invoicing never questioned by police Advisor rejects conflict claims on casino tender Michael Cassar and Cathy Farrugia ONE of the people whose presence on a board that was set up to evaluate casino licence bidders and allegedly prompted Economy Minister Chris Cardona to dismiss that board, has rejected claims that he had a conflict of interest. Following the board's dismissal, the casino tender was awarded to Eden Leisure Ltd, despite their fi- nancial offer of €1.25 million being around €3 million lower than that of Dragonara Gaming, who finished second. The issue is now in court, with Dragonara claiming that the government had agreed to award the tender to Eden at the very start of the tender process. A government report claimed there were three potential conflicts of interest within that board. One of them was Kevin James Fenech, a managing director of Fenci Consult- ing Ltd, a business consultancy firm that gives strategic advice to the Mal- ta International Airport. The reason for his potential conflict of interest was that the Bianchi family is both a major shareholder of Dragonara and a minor shareholder of the MIA. "I cannot comment on the sup- posed report which looked into the alleged conflicts of interest since I have never seen such a report, nor was I aware of its existence," Fenech said. "As far as I am concerned, and at this stage, this report, if it exists does not concern me. I can confirm that neither I nor Fenci have ever had, as clients, either of the two shortlisted bidders or their shareholders." Fenech added that the Ministry for the Economy had confirmed with him that they have never revealed who of the people forming part of the evaluation sub-committee had a potential or even an actual conflict of interest. Dragonara have rejected the rea- sons behind Fenech's conflict of interest as "the lamest of smoke- screens". "The Bianchi family members are in the same position as the other 6,500 shareholders of the MIA and have no entitlement to its manage- ment," Dragonara said in a state- ment. "Ironically, the government itself holds 20% of the shareholding of MIA and has a guaranteed seat on the board. This makes Chris Car- dona's assertion of conflict of inter- est on the part of the Bianchi family a joke in bad taste, were it not such a serious manner." Cardona said in parliament ear- lier this month that he had ordered the dissolution of the committee because "there was a conflict of in- terest, where one of the committee members or his company had pro- vided consultancy services to one of the bidders in the tender process". "There were other reasons [why I ordered the dissolution] but this was one of the more substantial ones," Cardona said. "I will stop by saying that." The government 'conflict of in- terest' report had gone on to sug- gest that a second board member, Jesmond Pace, could have had a conflict of interest because he had formed part of the Lotteries and Gaming Authority board back when the Dragonara Casino was awarded a 10-year licence in 2010. The report also named Kevin James Fenech's wife and business partner Roberta Fenech Gauci who, despite not sit- ting on the dismissed committee, had formed part of the same LGA board that Pace had.