ITS – Seabank deal: Chief negotiator’s ‘supervening conflict’ remains a mystery

RSM partner fails to explain sudden resignation


The chief negotiator of the highly controversial ITS deal, through which prime public land was given to the Seabank Group for private speculation, is refusing to explain the reason for his sudden departure from the committee leading the negotiations in 2016.

Ongoing investigations by The Shift can reveal that George Gregory, appointed to lead the negotiations with the Seabank Group by disgraced former Minister Konrad Mizzi, tendered his “immediate resignation” from the role two months after his appointment, in the middle of delicate negotiations.

Gregory had chaired the evaluation committee that chose Silvio Debono’s Seabank Group. He was appointed by Mizzi. Once the choice was made, Mizzi’s Projects Malta set up another committee to negotiate with the bidder. It is at this stage that Gregory left in April 2016, citing a “supervening conflict”, according to the report into the deal by the National Audit Office (NAO).

It is unclear why Gregory suddenly saw a conflict in negotiating with Seabank after he had led the committee that selected Debono’s project.

George Gregory

Asked by The Shift to explain this conflict, Gregory insisted that he cannot give any details “for professional reasons” as he “was not at liberty to divulge details regarding the conflict”.

He pointed out that he had provided an explanation to the NAO regarding the matter, and that “the Office found it to be a valid explanation of the context that gave rise to the conflict”.

While in its investigative report over the ITS deal published last March, the NAO stated that the former chairman leading the negotiations did give an “acceptable” reason, it did not even reveal Gregory’s identity.

Gregory’s colleagues evaluating the only bid for the land in question at St George’s Bay included the Commissioner of Inland Revenue Marvin Gearty, then Malta Enterprise CEO Mario Galea and Mizzi’s appointee as CEO at the Foundation for Medical Services, James Camenzuli.

Camenzuli was eventually promoted by Mizzi to chair the remaining negotiations with Silvio Debono’s group on the second committee.

Gregory is currently one of the leading partners at RSM, which had been the Labour Party’s auditing firm for decades. He was, and in some cases still is, a shareholder/director on several companies together with Deo Scerri, the founder of RSM.

Scerri, a staunch Labour supporter, was given several important appointments by Labour since 2013, including, until a few weeks ago, the powerful post of chairing Bank of Valletta, Malta’s largest bank.

The NAO’s investigation over the ITS deal found gross negligence and a total lack of transparency and good governance in the process leading to the agreement between the government and Silvio Debono’s Seabank Group.

The NAO’s report was also highly critical of the processes led by Gregory, particularly as no minutes were kept of the negotiations and discussions which took place, leaving the NAO in the position of being unable to ascertain certain facts.

The NAO had also questioned the regularity of the process used in this deal. Still, the government kept the deal in place and no review was ordered by Prime Minister Robert Abela.

Through this deal, slammed by constituted bodies and NGOs, some 25,000 square meters of land in Malta’s most sought after area will be turned into a massive hotel and residential tower, to be sold on the market as luxury apartments.

Deloitte had carried out a study on the 99-year concession based on what DB Group was proposing to build on the land – luxury flats and a hotel – and arrived at the figure of €56 million.

But DB Group is actually paying €15 million, which amounts to the premium, plus an annual ground rent of around €392,930 for the hotel and some other areas. This price is calculated based on what DB Group builds, so if it downsizes the project it pays less.

These payment terms were generously spread out with the premium payable over seven years without interest and the annual ground rent reduced to a nominal €1,000 until DB Group’s architect certifies the entire development as completed.

The project, which was supposed to be completed next year, has not even started, as its permit was struck down by the courts due to a conflict of interest by members of the Planning Authority.

It is not yet known when the PA will issue a new permit.

Yesterday, during the Daphne Caruana Galizia inquiry, Debono admitted that he donates thousands of euro every year to both the Labour Party and the Nationalist Party.


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Paul Pullicino
Paul Pullicino
1 year ago

The same abusive pattern as Electrogas, namely the government financing a privately owned project and with unspecified individuals personally benefiting.

Anna Briffa
Anna Briffa
1 year ago

There’s a very simple solution. I would hate Debono to feel he is being asked to pay over the odds. So he should walk away from the whole project and the people of Malta won’t mind taking their property back. That will clear up any aspersions about his character which he resents. Oh, and while he’s at it, he could drop those futile libel suits. Even he must realise that begging for some sort of deal with Daphne Caruana Galizia’s family will only tarnish any redeemed reputation.

Henry s Pace
Henry s Pace
1 year ago

silvio debono lays his two feet one on each side in the political arena.

Franci Darmanin
Franci Darmanin
1 year ago

Nahseb the envelope was too small?

Iain Morrison
Iain Morrison
1 year ago

Why on earth would someone fund both parties? It is obviously not because they fell that the broad interests of the individual or company aligns with their chosen party.
I suggest it is legalised bribery, with whichever party that attains power in hock to the donor.

Anthony Cassar
Anthony Cassar
1 year ago

Would be nice to know how much money this Audit firm pocketed over the past years. Might result that the OPM is one of the firm’s ‘sponsor’. Corruption knows no borders.

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