Updated | Damning audit finds PBS CEO John Bundy breached procurement rules on €500,000 car deal

An audit into the procurement of a €500,000 car leasing deal by PBS chief executive John Bundy has confirmed that procurement rules were broken and that Bundy “consistently bullied” his management.

The report by auditors RSM was commissioned by the PBS board of directors, who have demanded an independent verification of Bundy’s decisions after having taken a no-confidence vote against him.

The auditors said the deal was reached without approval of the board and that it was in breach of PBS procurement rules.

The €500,000 car deal, which included cars for both Bundy as CEO, and also the PBS’s former head of news Natalino Fenech – who since his departure in 2013, has been seconded to the University of Malta – was never green-lit by the board.

The issue was only raised at board level back on 18 January, 2017, when Bundy referred to the PBS car fleet. “[He] noted that the cars were now old. He had sought advice on whether to buy new cars or go for leasing, and found that it was cheaper to go for leasing.”

Bundy was said to have used a procurement method only employed for minor purchases, by obtaining three quotations from leasing suppliers. The person actually responsible for procurement, corporate services manager Edmund Tabone, was completely side-lined.

MaltaToday had revealed that the PBS’s board of directors had actually voted on a motion of no confidence against Bundy.

In total, 14 different contracts were signed for a total value of €4,415 monthly, plus VAT: for the contract duration of eight years, the amount totals €500,131. The directors said that the leasing of cars for a period of eight years was “not considered as the norm”. In fact, government procurement regulations for such an amount obliged PBS to issue a public tender.

The RSM report also heard witnesses say that Bundy ignored warnings from managers against a hefty advertising barter for a free cruise for participants of the Eurovision Song Contest.

Bundy went into a vulgar outburst on being told that the advertising barter for a paid cruise holiday for the Eurovision contenders, would raise eyebrows. “He said ‘I don’t give a damn about the board’,” financial controller Brian Galea said in an affidavit.

A secret vote by PBS directors later delivered a unanimous verdict of no confidence, which was communicated to chairman Tonio Portughese. But ultimately, it is minister Owen Bonnici who would have to assume responsibility for Bundy’s dismissal. Bundy was installed in his position without any formal call for applications for CEO, after the departure of Anton Attard, on a four-year contract.

In their letter to Portughese, the board said they had convened to discuss the way Bundy “had, on several occasions, ignored the board of directors and taken decisions which required the approval of the board”.

The board said it considered Bundy’s attitude towards the PBS directors as one that showed a lack of respect.

“Worse than that, it shows a lack of awareness of what the relationship should be between a CEO and the board of directors, which in terms of the law have enormous personal responsibility for everything that happens in the company.”

The directors said they were also faced with legal threats from companies when they attempted to reverse Bundy’s “arbitrary decisions”.

“These decisions were presented to the board as a fait accompli, and the directors were faced with threats of legal action against them personally and the company.”

The directors said they could no longer tolerate the situation and declared they had no faith in Bundy.

John Bundy reacts

In a Facebook post this afternoon, John Bundy claimed that PBS chairman Tonio Portughese and his inner circle had for a long time been wanting to get rid of him.

John Bundy's Facebook reaction

He said he was not notified that an independent inquiry on him had been undertaken, and he only got to know of its results through the media.

The PBS Board had met in secret, he said, and had acted as prosecutors, jurors and magistrates all at once. They condemned him without ever allowing him to participate in the inquiry.

The purpose of the inquiry was to see if he was guilty, he added, as he emphasised that the Board should be ashamed of themselves.