Mark Gasan did not explain to the public inquiry board during his testimony on Monday why he had suggested “going to the minister” on the €40 million in excise tax Electrogas had to pay.
The Shift had revealed that former Energy Minister Konrad Mizzi had gifted the consortium the amount over the course of the project, with the €40 million bill landing in the taxpayer’s lap.
The Shift had also revealed that in an email in January 2017, GEM Director Mark Gasan told his colleagues that the “excise tax is a €40 million issue that if we resolve [with the Minister] will heavily impact [our profitability]”.
Asked by the judges leading the public inquiry into journalist Daphne Caruana Galizia’s assassination to explain why he suggested the Minister’s involvement, Gasan did not reply.
When pressed by Judge Abigail Lofaro, Gasan said: “I suggested we go to him to resolve the issue”.
“Was there a suggestion that this could be resolved by bypassing parliament?”
“I saw something in the media”.
The Shift had revealed in its investigation into the deal that the Commercial Director of Electrogas at the time, Catherine Halpin, even suggested to Fenech and Gasan that Electrogas “go over Enemalta’s head” on the issue.
Gasan insisted there was “nothing untoward” about this and said he was frustrated that Electrogas had remained silent about it. “I’ve been pushing for Electrogas to respond,” he said.
Yorgen Fenech’s leading role
Gasan’s testimony, while contradicting some of what Paul Apap Bologna said last week, shed some light on how things played out behind the scenes as the press revealed further findings on the project and its links to the journalist’s assassination.
It was George Fenech (Yorgen Fenech’s father) that pushed forward a dead project conceived by Apap Bologna several years earlier. His son, Yorgen Fenech, was a childhood friend of former chief of staff Keith Schembri. Prior to the 2013 election, Keith Schembri headed Labour’s Energy Working Group.
Gasan told the Court on Wednesday that he met Schembri only after the 2013 election, although Joseph Muscat was invited to Gasan’s wedding. Gasan met Mizzi for the first time at the inauguration of the Electrogas project, he said.
The power station deal became one of the Labour Party’s main promises in a campaign that swept them to power.
Apap Bologna also told the public inquiry last week that although the project was his idea presented to the PN, and rejected, years earlier, he had not approached the Labour Party prior to the election.
It was one of the first projects the Labour Party set into motion following the 2013 election based largely on the fact that an impossible deadline had been presented to the public, which was in fact missed.
Gasan said he called Yorgen Fenech about 17 Black, the vehicle for kickbacks to government officials, and was told it wasn’t his. “If it’s not yours, come out and deny it,” Gasan said he told him.
Profit, no profit
Gasan told Lawyer Jason Azzopardi that, based on PwC projections, his family was expecting to invest €5 million in the venture and that the capital to build was forecast to be €250 million. “But the real numbers came after July 2013, when the request for proposals was issued. The costs were substantially higher.”
Gasan says that the project would later be affected by “substantial” cost overruns.
In a statement last week, the Gasan Group said: “We have not received any dividends and have only registered losses in relation to our investment in Electrogas.”
Profits are expected in 2023 according to Apap Bologna or “the end of the decade” according to Gasan.
Yet Electrogas shareholders were paid some €6 million in ‘development fees’ and ‘success fees’ (compensation structure paid for successfully closing a transaction). This was confirmed by Apap Bologna in court last week.
Gasan said he knew Gasol was in financial trouble, but SOCAR was backing them. Apap Bologna, who said he had first approached Gasol, said he wasn’t aware.
While Apap Bologna said he only attended board meetings when he was made director following Yorgen Fenech’s resignation in the weeks leading up to his arrest as the suspected mastermind of Caruana Galizia’s assassination, Gasan told the Court today that both he and Apap Bologna would attend board meetings prior to 2019.
Gasan also said that Yorgen Fenech wanted to resign his directorship in GEM Holdings in May 2019, six months before his actual resignation later that year.
Gasan said he was “shocked” when he heard of the potential connection of Fenech with the murder of Caruana Galizia.
“As GEM Holdings, we had an issue with the quorum and there was little we could do if Yorgen was not turning up. I have no authority on Tumas Group’s representative. I don’t see what action I could have taken. Yorgen was appointed by Tumas Group, I have no power there.”
He said he was aware that Siemens was trying to have Fenech removed in 2019.
“It had to take Siemens, not the Maltese shareholders in the venture to take action,” Judge Lofaro noted.
“We were extremely concerned with the situation, we were meeting with lawyers and we wanted to preserve our reputation,” Gasan added.
Tumas Energy (Fenechs, 35.17%), New Energy Supply Ltd (Yorgen Fenech, 8.17%), Gasan Enterprises (35.17%) and CP Holdings Ltd (Apap Bologna, 21.5%) together own GEM Holdings, which then owns 33% of the Electrogas gas-fired power station in Delimara. The partners are Germany’s Siemens and SOCAR of Azerbaijan.
Request for France to open investigation into Electrogas loan
Meanwhile, the Daphne Caruana Galizia foundation teamed up with French organisation Sherpa to request that France’s national financial prosecutor’s office opens an investigation into whether four French-based banks and an investment fund were complicit with Electrogas in laundering the proceeds of corruption.
The complaint was filed against BNP Paribas, Societe Generale, Natixis, CIC and Rivage Investment. It notes that the financial institutions that gave Electrogas the loan should have flagged information in the public domain, revealed by Caruana Galizia, linking the deal to corruption.
At the time of her assassination in October 2017, Caruana Galizia was going through a leaked cache of Electrogas documents.
Electrogas has denied any corruption, citing an unpublished internal review.