Update 2 | Azzopardi sues Bonnici for libel: ‘Be my guest,’ Minister replies

Former Nationalist Minister Jason Azzopardi had interfered in the transfer of the land of the former Lowenbrau brewery in Qormi, Justice Minister Owen Bonnici announced on Saturday.

Bonnici, who was addressing a press conference on the matter, inisted he now had “sworn information” to confirm that Azzopardi had interfered in the process of sale and ensured the land was sold in 2009 at 1990 values, a mere €706,400.

On his part, Azzopardi said he would be suing Bonnici for libel, insisting that this was "all a lie". To this in a statement, Bonnici replied: "Be my guest."

The plot of land at Ta’ L-Istabal, Qormi, measuring approximately 21,000 square metres, was originally granted to Löwenbräu Ltd by the Government of Malta on 13 November 1990. This direct allocation of land was authorised by the Minister for Economic Affairs, justified in terms of the economic benefit that was to be generated.

The Minister had established that the allocation was to be made on a perpetual basis against the annual payment of a non-revisable ground rent of Lm 10,000 (€23,294). The contract stipulated that the land was to be used specifically for the production of alcoholic and non-alcoholic beverages.

Justice minister Owen Bonnici

On 1 December 2009, LBM Breweries Ltd submitted a request for the redemption of the perpetual ground rent. The Government Property Division (GPD) endorsed this request on 2 December 2009, simultaneously authorising the cancellation of all the conditions burdening the land in Qormi, which effectively rendered the site free and unencumbered.

This agreement was formalised through a contract entered into by Government with LBM Breweries Ltd on 3 December 2009, wherein payment of €465,875 was effected.

But the following May, Labour Party MP Charles Buhagiar had queried the agreement in a parliamentary question, prompting the Commissioner for Lands to send a judicial letter to Vassallo’s Catergroup demanding it cancel the illegal contract.

The Commissioner of Land noted that the transfer of the land following the cancellation of the conditions had probably been in breach of the Disposal of Government Land Act, which allowed for the sale of such land to be made only through a call for tenders or through a parliamentary resolution.

The following January, close to the general elections and through the intervention of Jason Azzopardi – according to Bonnici – a committee of three architects had then valued the property at 1990 rates,a meagre €706,400.

The difference between the €706,400 and the €465,875 paid in 2009, that is, €240,525, was settled against compensation due to the company for other properties that had been previously expropriated.

“Vassallo left the deal with change leftover,” Bonnici said. “The auditor general's report says that in this particular case, the minister should have questioned the established value of the land. “The minister bears an element of responsibility for this gross misrepresentation of this value of the land.”

The site of the former Lowenbrau brewery in Qormi

Bonnici revealed that he had sworn information that Vassallo had gone to Azzopardi and had been told that a compromise would be sought.

“Jason Azzopardi, the same person who is calling everyone corrupt, had sought a compromise,” Bonnici said. “And they found that compromise.”

He noted that Azzopardi has not assumed any political responsibility for this very serious case involving over 1,200sqm.

Asked what he meant by political responsibility, Bonnici said that he recalled the leader of the opposition saying that he would not tolerate corruption for more than a few seconds. He called on Simon Busuttil to now put his words into action.

In the Gaffarena case, the government had immediately filed a court case to return the land to the government, the minister recalled. 

“The way which this contract was made, showed great skill.” Bonnici said. “I have to hand it to him.”

NAO report questioned transaction legality

The transfer of land was the subject of a report by the Auditor General, tabled in Parliament on 19 December, and which concluded the transfer of the land was fraught with failure in terms of good governance, accentuated by “the extraordinary haste of the process”, which should have involved – but did not – various ministers and even parliamentary intervention.

In seeking to determine the legality, or otherwise, of the transaction, the NAO noted that the Commissioner of Lands and the GPD notary put forward opposing views, and that the issue was directly related to an ongoing court case involving the government “Irrespective of the eventual outcome of this dispute, this Office is of the opinion that this matter could have been averted had an open call for tenders or referral to Parliament been resorted to,” the NAO said. “Aside from eliminating any doubt as to the legal basis of this disposal, resort to any of these options would have ensured an element of transparency and scrutiny.”

Moreover, the NAO argued that had such procedures been referred to, the government would have secured payment for the freehold value of the land, that would have been much higher than the mere redemption of ground rent and reflected the true value of the site at the time.

The NAO also drew attention to evidence indicative of prior agreement between Marsovin Ltd and Agrico Ltd (shareholders of LBM Breweries Ltd), and Vassallo Builders Group Ltd, which was contingent on the government acceding to the cancellation of conditions burdening the land in Qormi.

“This latter aspect is of concern to the NAO as evidence reviewed indicated that Government was aware of, and possibly facilitated, this transaction,” the NAO said.

“This Office’s convictions are supported by the preliminary agreement entered into by Marsovin Ltd and Agrico Ltd as vendors and Vassallo Builders Group Ltd as purchasers on 30 November 2009, wherein it was stipulated that the entire shareholding of LBM Breweries Ltd, whose sole asset was the land in Qormi, was to be transferred subject to Government’s agreement to cancel the conditions burdening this land within seven weeks.”

The NAO said that – had the appropriate legal mechanisms for the disposal of government land been adhered to - the cancellation of those conditions within the stipulated seven-week period was a highly improbable outcome.

Other supporting evidence was an LBM Breweries Ltd board resolution to proceed with the redemption dated 1 December 2009 and a bank draft by Vassallo Builders Group Ltd payable to the Commissioner of Land dated 2 December 2009.

Highly indicative was an affidavit by the Chairman of  Vassallo Builders Group Ltd, wherein it was stated that the representatives of Marsovin Ltd had informed him that they had an agreement with the Minister and the GPD for the cancellation of all the conditions on payment of €465,875.

Additionally, Marsovin Ltd had assured the chairman of Vassallo Builders Group Ltd that once Marsovin Ltd had sourced the required funds, the transaction rendering the site free and unencumbered would be effected within a few days.

“Although these allegations were denied by all involved, the NAO is of the opinion that the facts of the case lend credence to that stated,” the report said.