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James Debono
A Board of Enquiry appointed by Prime Minister Lawrence Gonzi in October 2006 has absolved former Sea Malta chairman Marlene Mizzi from the charge of withholding information to the Privitisation Unit and MIMCOL on the controversial valuation of Sea Malta’s main asset: the ship Maltese Falcon.
Chaired by retired judge Dr Albert Micallef Manche, the board concluded that no disciplinary measures should be taken against Mizzi or any other former Sea Malta official.
The board was appointed following accusations of monkey business on the valuation of the Maltese Falcon by Austin Gatt’s ministry.
Former Sea Malta chairman Marlene Mizzi feels vindicated by the report. In an article which will appear on next Wednesday’s edition of MaltaToday, the former Sea Malta chairman launches a scathing attack on Austin Gatt.
“I have no doubt that, he would have loved to crucify me if even the slightest peccadillo were to be found… Evidently, my not having been publicly hung, drawn, and quartered by Austin Gatt is certainly not for lack of his trying,”
Mizzi is now calling on the Prime Minister to open “a fully-fledged investigation on how the Sea Malta sad and sorry story came about and how the disposal of public assets was handled.”
The Maltese Falcon was valued at EUR 5.5 million by French brokers Barry Rogliano Salles – a million dollars more than the value given to the ship in the memorandum of understanding with prospective buyer Atlantica Spa di Navigazione on June 14 2005.
The value quoted in Memorandum of Agreement was based on a valuation by the same Barry Rogliano Salles in 2004.
The French broker’s new appraisal led to an appreciation in the value of the Maltese Falcon which was registered in the Sea Malta audited accounts for the year 2005. This led to the company declaring a Lm 250,000 profit.
In a strongly worded statement issued on July 18 Austin Gatt’s Ministry alleged monkey business, denouncing that “someone in Sea Malta came with the idea of doing something to turn the company’s results for 2005 in to positive ones.”
“On June 15 2005 – 10 days after the closure of the financial year – this person produced a new valuation signed by a French company that appreciated the value of the ship by Lm 666,674. Because of accounting rules, this amount was considered a profit and thus instead of showing real losses of more than Lm 400,000 Sea Malta registered a virtual profit of Lm 250,000.”
The ministry also claimed that it was not convinced that the valuation was genuine because ships, like cars, normally lose value with time and do not appreciate by Lm800,000.
On October 28 a board of enquiry was to establish whether Sea Malta officials should have informed the government’s privatisation unit on the new appraisal which led to an increase in value of the Maltese Falcon.
The enquiry concluded that the valuation on the Maltese Falcon had nothing to do with negotiations for the sale of the government’s share in Sea Malta to Atlantica Spa, and were conducted at the request of the Sea Malta’s auditors.
It also concluded that Sea Malta officials had no duty to disclose the valuation of the Maltese Falcon to the Privatisation Unit before the approval of the company’s accounts in an annual general meeting.
According to the Manche report “the valuation carried out in June 15 2006 did not bind the company,” as it had not yet been approved by the directors and the share holders.
In fact upon his appointment as chairman following Marlene Mizzi’s resigniation, Ivan Falzon had asked for three other appraisals for the Maltese Falcon from another company which gave a lower value to the ship than that established by the French Brokers.
It also established that on 14 June 2005, when the memorandum of understanding between the Privatisation Unit and Atlantica Spa was signed, Marlene Mizzi and the other directors on the Sea Malta board were not aware of the valuation carried out on 15 June.
The board also established that Sea Malta general manager Joe Bugeja did not manage to inform Marlene Mizzi on the new valuation of the ship since she was abroad between 15 and 20 June. Immediately upon returning Mizzi submitted her resigniation as chairman.
Marlene Mizzi testified that she had never seen the valuation carried out on 15 June.
Upon being informed that Mizzi had resigned, Bugeja immediately wrote to MIMCOL chief executive Mario Mizzi that the company auditors had asked for a valuation update on the Maltese Falcon on the basis of which the company’s accounts were being calculated.
The Manche report also establishes that the two appraisals carried out by Barry Rogliano Salles were not conducted capriciously, but were required due to changes in “International Accounting Standards.”
The report also notes that the two valuations were carried out without an onsite survey of the ship but it also notes that “this is a common practice.”
In her article, Marlene Mizzi notes that the Manche enquiry has now opened a can of worms as it exposed the government’s lack of interest in getting a fair price for Sea Malta.
Since the report concludes that the Privatisation Unit was not due any information from the Board of Directors about the real and current value of the most important asset of the company, Mizzi asks “why was this information not sought by the Privitisation Unit and the ministry on their own steam? How can anyone sell something and expect to get the best price for it, if one does not know the value of what is being sold?”
Mizzi contends that the government was selling Sea Malta without any knowledge of the value of its assets.
“This is exactly what happened in the case of the Maltese Falcon and in the case of the whole value of the business portfolio of Sea Malta. And yet nobody seems accountable! No Minister, a ship is not a car and the concept of impairment is not monkey business”
Marlene Mizzi’s article will be published in the midweek edition of MaltaToday next Wednesday.
jdebono@mediatoday.com.mt |
