Fortina denies it has agreed to ‘pay the difference’ following NAO investigation

The Fortina Group has denied claims made by lawyer Jason Azzopardi it has agreed to pay the difference in value on the 2019 deal with government.

The deal was investigated by the National Audit Office, which found that Fortina paid substantially lower compensation after a top Lands Authority official kept a report proposing a higher valuation hidden.

The damning NAO report was tabled in parliament on Monday and a day later, the Maltese branch of Fondazione Falcone, an anti-mafia organisation, along with lawyer Jason Azzopardi filed a criminal complaint with the police asking for a criminal investigation into the findings of the NAO.

After this, Azzopardi took to Facebook and claimed that Fortina had “accepted to pay the difference of millions of euros so that the government will dampen the impact of the scandal”. The lawyer said any such action does not mitigate the “fraud and criminal conspiracy” that happened.

However, a spokesperson for the Fortina Group told MaltaToday: “Fortina categorically denies claims stating that it has agreed to ‘pay the difference’. It is to be noted that the process announced by Deputy Prime Minister Ian Borg has yet to start and augurs that any decision taken will be in line with policy and fair.”

On Tuesday, Borg convened an urgent meeting of parliament’s National Audit Committee to discuss the Fortina case. This committee, which approved the 2019 deal, was misled back then since the report proposing higher compensation was not made available to it.

The debate proper is expected to start on 6 October with Borg going on record saying the government intends to “recover every cent owed to the public” from the Fortina deal.

The company spokesperson added: “Fortina wishes to underline that the value agreed upon and passed through parliament in 2019 was not for the purchase of the land, as many are wrongly claiming. The price paid was only for the removal of two conditions on a small part of the land owned by Fortina for nearly 40 years.”

In its first reaction to the NAO findings, the company said it would study the voluminous report before commenting on it.

The case revolves around four parcels of land in Sliema that Fortina had acquired many decades earlier for the development of its hotel. These land parcels had contractual conditions tied to them that limited the type of development and building heights that Fortina wanted to be waived.

In 2019, Fortina entered into a new contract with the government that waived the conditions against payment of €8.1 million. However, the NAO found that an independent audit firm had valued the waivers at a maximum of €23.9 million but this report was kept hidden by the authority’s then chairman Lino Farrugia Sacco. The NAO also revealed that Keith Schembri, the chief of staff at the Office of the Prime Minister, also knew about the higher valuation but was involved in the efforts to conceal it.

Schembri has denied any wrongdoing and told the NAO he could not recall his involvement in the Fortina deal.