Minister warned of Frank Sammut’s conflict of interest in 2004

Minister Austin Gatt was alerted to unfair practices or an alleged conflict of interest inside the MOBC ahead of its privatisation in 2004, a parliamentary question tabled by Labour MP Leo Brincat reveals.

But the then-investments minister claimed he had no concrete proof to put forward in an investigation.

Leo Brincat had told Gatt in April 2004 that Frank Sammut, then chief executive of the Mediterranean Oil Bunkering Corporation, was reported to be planning to leave MOBC when his contract expires and become an independent consultant for the recently formed company Island Bunker Oils Ltd.

The company would later tender, successfully, for the usage of MOBC's spare bunkering capacity.

The report published in the April 2004 issue of Bunkerspot, an intelligence publication for the global bunker industry, read:

"Frank Sammut, MOBC's chief executive, will soon leave the company to become an independent consultant and it is widely suspected that he will be closely associated with recently formed private company Island Bunker Oils. Some in the industry are concerned this could mean that Island Bunker Oils might inherit some or all of MOBC's supply business and be treated more favourably than its competitors in terms of obtaining storage capacity at the terminal. This prospect has been greeted angrily by some of the smaller players in Malta, who claim that such an arrangement would be hugely disappointing. Island Bunker Oils has an exclusive brokerage arrangement with Palm Shipping Agency, which is seen by some as potentially harmful to their own business."

While Sammut did not hold a registered directorship or shareholding in Island Bunker Oils Ltd, the company was at the time tendering for the use of MOBC's spare capacity after MOBC was sold by Enemalta to the government as part of a recapitalization process; and had its bunkering operations cease to instead be used as an oil storage depot.

Additionally, Enemalta chairman Tancred Tabone would later become a director and shareholder of Island Bunker Oils in May 2008 - three years after leaving Enemalta.

The Bunkerspot report however coincides with the sale of MOBC, which led to the termination of the role of MOBC chief executive. Instead Sammut was then being employed as a consultant to Enemalta and MOBC chairman Tancred Tabone to "reorganize and rationalize" the storage of petroleum products.

Earlier in January 2004, again in reply to a PQ from Brincat, Gatt told the House that the MOBC "was not aware of the allegation that a director had an interest in bunkering operations. The company says no director has a conflict of interest. But the Honourable member is invited to be more specific, even confidentially, and I ensure there will be no problem to carry out the necessary investigations."

Then in April 2004, in a reply to Brincat, Gatt specifically referred to allegations being made against Island Bunker Oils, and said that he had received many "written" allegations of conflicts of interest, but that the accuser had not supplied any proof that could give anything concrete.

"I suggested that if he had any suspicions he should make a report to the police, the ombudsman, or the Permanent Commission Against Corruption. I know this person who made these allegations filed a report to the Ombudsman, and that the Ombudsman is investigating. This is what I can report," Gatt told Brincat.

In a comment to MaltaToday, Leo Brincat said that as minister for commerce he had been lobbied by Frank Sammut so that he be made chief executive, but that he had refused. "It looks like the Nationalist government of the day had such faith in him that he was indeed made CEO soon after."