Tista’ taqra l-artiklu bil-Malti hawn.

The companies partially owned by current Bank of Valletta (BOV) chairman, economist Gordon Cordina – E-Cubed Consultants Ltd and E-Cubed iSlands Ltd – have raked in over €1.4 million in government consultancy contracts since 2013.

While Cordina owns 50% of these companies, the other 50% is owned by economist Stephanie Vella, who was appointed as a governor on the Malta Financial Services Authority’s (MFSA) board in March 2021. Cordina was appointed as BOV’s chairman in October 2020. In 2016, Cordina and his staff had left Nexia BT following the Panama Papers scandal.

In total, 64 direct orders and tenders were awarded to E-Cubed Consultants Ltd and E-Cubed iSlands Ltd over the last nine years, the overwhelming majority of which were issued through direct orders, the government’s instrument of choice for public procurement.

While there is no legislation preventing Cordina from simultaneously holding the role of chairman of the Bank of Valletta and carrying out consultancy work, sources consulted by The Shift have raised concerns about a possible conflict of interest, especially since Cordina is still carrying out private consultancy work.

Vella’s dual role as a government consultant and governor on the Malta Financial Services Authority’s board also raises similar concerns, given that the Authority serves as both regulator and advisor to the government on matters of economic policy. Questions about this potential conflict of interest were sent to both Cordina and Vella.

In his responses, Cordina maintained that there is “no inherent conflict of interest” between his two roles, describing “the undertaking of additional professional work by holders of non-executive board roles” as a “very typical arrangement” since such roles are of a part-time nature and for a limited period of engagement.

Cordina further stated that the arrangement was disclosed and approved by regulators and that he would disclose any potential conflict of interest should it arise.

“While all these governance safeguards are in place to ensure proper conduct, I am very conscious of the sensitivities which the role brings, also in consideration of the fact that the Chairman role is a Government appointment. There are a number of public sector entities among the clients of E-Cubed Consultants Ltd, among other clients locally and abroad,” Cordina said.

“I therefore strive to ensure that my decision-making and behaviour are at all times dictated by objectivity and professional independence. In this, I am accountable to the regulators, to the Board and to the collectivity of shareholders. Finally, if you allow me, on a personal level, my professional integrity and reputation depend on this,” he added.

Vella told The Shift that her role as executive director of E-Cubed Consultants and governor on the MFSA’s board are “distinct from each other”.

“My involvement and shareholding in E-Cubed has been adequately disclosed. Should there arise any potential conflict of interest I would disclose them accordingly in line with policies and procedures. In both of these distinct roles, I conduct my functions to the best of my ability and in an objective manner,” Vella added.

A closer look at the 64 contracts outlined above shows that Cordina’s economic consultancy services to the government largely consisted of studies, assessments and analyses for projects the government intended to embark on.

One recent example of this kind of government consultancy work includes a cost-benefit analysis carried out by Cordina and economist Victoria Apap, who is one of Cordina’s employees at E-Cubed iSlands Ltd.

The analysis, which was published in February, was carried out on behalf of the Gozo ministry to determine the economic feasibility of its intent of converting an abandoned heliport in Xewkija, Gozo into a 450m airstrip for small aircraft flights.

According to Cordina and Apap’s analysis, the project is justifiable from an economic standpoint, and could potentially operate just shy of 70,000 trips a year at an estimated average of €30 per ticket. Using this analysis as justification, Gozo minister Clint Camilleri has vowed to press on with the project.

In the past, both companies owned by Cordina and Vella have carried out similar work, with the Central Link project being one of the biggest examples of their consultancy work being subsequently used to justify government projects.

Besides providing a cost-benefit analysis for that and other road projects carried out by Infrastructure Malta, E-Cubed Consultants Ltd was also paid to provide consultancy services on other major government initiatives.

Three contracts of particular significance include Cordina’s services being contracted “in connection with Malta’s 2017 Presidency of the Council of the European Union”, a cost-benefit analysis for the Malta-Gozo tunnel, and an analysis of a public service concession contract for a fast ferry service between Malta and Gozo.

BOV’s woes

Cordina’s two-year tenure at BOV began following his predecessor’s decision to step down in May 2020, assuming the role of chairperson of the bank’s board a few months later.

BOV has been hit by a raft of scandals and scathing reports both before and after Cordina’s appointment, with a Reuters exclusive from 2019 revealing how the European Central Bank had been sending warnings to the bank about its lax anti-money laundering protocols since at least 2015.

The same article also showed that in spite of an increased volume of high-risk foreign customers opening up local bank accounts, BOV had not tightened its controls, with several cases showing that the bank had no information at all about their sources of wealth.

In 2019, BOV was cut off from its last US dollar correspondent bank, ING, following a de-risking exercise in which ING essentially concluded that the business it carried out with BOV was not worthwhile amid a climate of increased financial scrutiny both in the country and across the globe.

Two years later, BOV was fined €2.6 million by Malta’s Financial Intelligence Analysis Unit (FIAU) for failing to carry out due diligence on the beneficial ownership of 2,442 corporate customers.

BOV was also under fire following the conclusion of the seven-year Deiulemar Trust saga, in which the bank was forced to pay out a €182.5 million settlement. As a result of this settlement, BOV registered a loss of €76.6 million in the first two quarters of 2022.