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Louis Grech denies links with Brian Tonna under oath, despite former business ties

Former Prime Minister Joseph Muscat with Louis Grech (centre). Photo: DOI/Kevin Abela

Former Deputy Prime Minister Louis Grech on Friday denied knowing Nexia BT’s Brian Tonna or what work he did for the government, despite public documents showing former business ties between the two.

Public documents available on the Malta Business Registry show that Grech as a majority shareholder in the company 1999 LTD, which in turn is the majority shareholder of catering company S G Catering, within which Tonna held the position of director, legal representative, judicial representative and company secretary until 12 April 2016, merely days after the Panama Papers were exposed.

The massive expose showed that Nexia BT had facilitated the creation of offshore companies for disgraced former government officials Keith Schembri and Konrad Mizzi.

Assassinated journalist Daphne Caruana Galizia had reported that such ties between Grech and Tonna show that the two were “close collaborators” since “at least as far back as 2002”, and she had said that this therefore confirms that “contrary to popular belief”, it was Grech who introduced Tonna to the government.

On Friday, Grech acknowledged that Tonna had worked for one of his children’s catering company but denied being a business partner with him.

Asked by the board whether he ever noticed that Tonna had a certain presence in Castille, Grech said that he “often saw him there”. Questioned by family lawyer Jason Azzopardi about direct orders and tenders to Nexia BT following the Panama Papers revelations, Grech said his ministry never gave any direct orders to the company.

Links between Grech, Tonna and the government date back further. The Egrant inquiry had found that Michelle Muscat, wife of former Prime Minister Joseph Muscat had worked for Tonna’s company 8 Point Services Ltd. to provide assistance to Grech during his tenure as an MEP.

During his testimony, Grech also told the public inquiry looking into the murder of Caruana Galizia that he had expressed concern about the Panama Papers scandal said that the situation was “unacceptable”.

“My position was clear, I spoke in parliament, the position of Konrad and Keith [Schembri] was not tenable. That is what I told the Prime Minister, I had said it about three times. I told him what I thought,” Grech told the board. 

“Panama [Papers] was definitely a setback to our administration,” he said. He said he had also spoken to Mizzi about his opinion and told him to resign.

The topic turned to Schembri and what was referred to as “the Kitchen Cabinet” by Minister Edward Scicluna in previous sittings. Grech said that from his understanding of what a kitchen cabinet is, there wasn’t one.

“How I understand a kitchen cabinet is that there is a group of people who decide the items of a [government] cabinet, but I do not think that that was the case. In hindsight, it can be that they were referring to a form of operation of individuals who used the government for specific things and exceeded the limit.” He said that if this was the case, such people must answer for their actions.

Minister Scicluna had spoken about the existence of a kitchen cabinet within the government which included Schembri and other consultants including individuals from top legal firms who were involved in both the Eelctrogas and VGH deal.

Grech said that Schembri had influence and was “a powerful personality”. “Too much power concentrated in one person,” said Judge Abigail Lofaro. However, Grech said that Schembri’s power did not bother him personally as he did not pass through him to speak to Muscat.

Questioned about Electrogas, Grech said he did not play any role in the Electrogas deal apart from being part of the Cabinet. He said that the energy plan was discussed prior to the election. 

“So prior to the election was it already identified which power station is going to be constructed?” asked Said Pullicino. Grech replied that he recalls a presentation on energy policy given by Konrad Mizzi. “I think it was Mizzi who gave us a presentation about the advantages of the energy policy and how it will be beneficial,” he said.

Asked about the government guarantee to Electrogas, Grech said he gave consent, and that abroad such guarantees are common. “Although there were concerns, there was no red line,” he said. He said that the guarantee was to stand until the scheme was approved by the EU.

The Shift has recently revealed that Electrogas was given a €40 million rebate on excise tax in an arrangement by disgraced Minister Konrad Mizzi.

Grech also said he was not aware of any allegations linked to the Montenegro deal and only found out about them through the media. He said the deal by Enemalta was not discussed by the Cabinet as it concerned the company.

Caruana Galizia family lawyer Jason Azzopardi asked Grech when he knew about that an early election was going to be called in 2017. Grech replied that Muscat had first spoken to him about it first a few weeks before calling the election, then a couple of days after that.

Because of protests and other factors, Muscat felt “uncertainty and instability about the economy,” he said.

When asked about the appointment of Sai Mizzi, Konrad Mizzi’s wife, at the consul in Shanghai, or about the MOU with China Communications Construction Company (CCCC), Grech said he had “asked about them”. He said that a due diligence after the signing has found that the company was black listed and the project stopped.

“A simple Google search would have shown you that it was blacklisted. I don’t expect the minister to do those searches but.. who is responsible to check these things?” asked Azzopardi.

Grech agreed with Azzopardi, saying “il-hmar iwahhal f’denbu” (everyone blames each other), and added that it could not be known.

Azzopardi asked about a visit by the Azerbaijani Minister for Energy to Malta in April 2016, where he met with Keith Schembri, Konrad Mizzi and Joseph Muscat. Grech said  he did not meet the Azerbaijani minister and was not informed about it, despite being the deputy Prime Minister.

“You didn’t meet them when they went outside Malta, and not even when they were in Malta,” noted Said Pullicino, referring to the incident where Schembri, Mizzi and Muscat had travelled to Azerbaijan without inviting media.

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