A blacklisted adviser hired by former prime minister Joseph Muscat’s government has been linked to potentially suspect payments in Malta’s public transport contract and the Kappara junction project.

Shiv Nair, who was permanently blacklisted by the World Bank for fraud and corruption in 2000, was one of the focal points in a financial investigation into former Transport Malta CEO James Piscopo.

Investigators found Piscopo, a former Labour Party CEO, received “suspicious” consultancy payments in 2015.

The payments were received in the same year Transport Malta oversaw the €35 million Kappara junction project and a new company took over the operations of Malta’s public bus service as part of a multi-million-euro contract.

Documents seen by Times of Malta show Piscopo was the subject of a police corruption, tax evasion and money-laundering investigation concerning his time at Transport Malta and, later, as CEO of the Lands Authority.

New details about the probe are now being revealed as part of a joint investigation between Times of Malta, Amphora Media and MaltaToday.

Intelligence handed to the police indicates Piscopo opened numerous bank accounts locally and internationally, both in his own name and via trusts. Although trusts have legitimate uses, they can also be used to conceal the true ownership of financial assets.

Investigators traced €30,000 in suspicious “consultancy” payments Piscopo received locally while at the helm of Transport Malta.

They also discovered cash flows linking Nair to millions of euros in potentially suspicious payments believed to originate from Malta Public Transport and Constructora San Jose SA, two Spanish-linked companies separately involved in the bus service contract and the Kappara junction project.

Nair, who was hired in 2013 by the government’s investment body Malta Enterprise to identify “concrete leads” for international investment in Malta, is suspected by investigators to have received funds from his “involvement” in the two government tenders.

Documents reviewed by Times of Malta, which date back several years, indicate investigators had not established a direct financial link between Piscopo and Nair.

Questions to the police about the current status of the investigation went unanswered.

The probe into the ex-Transport Malta CEO was triggered following claims by Muscat’s ex-chief of staff, Keith Schembri that Piscopo had €600,000 hidden in an overseas account.

Piscopo and Nair deny wrongdoing.

‘Stupid’ payments

Investigators noted how, at the time the two major infrastructure contracts were awarded, Piscopo received €30,000 in cheques from Robert Borg, an accountant facing fraud charges in the Vitals/Steward corruption case.

Piscopo headed Transport Malta, the government body that oversaw both projects.

In seven of the nine cheques cashed by Piscopo, Borg, who was Transport Malta’s board secretary, was listed as both the payer and payee, effectively writing the cheques out to himself.

The cheques were then endorsed to Piscopo, who deposited them into his account. Investigators suspect this method was intended to obscure the reason behind the transactions.

Times of Malta is informed of further payments between Borg and Piscopo’s Undecim Five Investments, a company he later renamed and eventually dissolved.

Borg transferred €20,000 to Piscopo’s Undecim Five while Undecim Five transferred €10,000 to Borg.

Piscopo confirmed that he received the payments from Borg, with whom he said he has a longstanding friendship.

However, he insisted that the payments were linked to a consultancy firm he operated with Borg while serving as Transport Malta and Lands Authority CEO.

Piscopo said taking those legitimate “consultancy” payments while in government can be seen as “stupid” but not illegal and, ultimately, rejected any links to kickbacks from government projects.

He insisted that the Kappara junction project was fully audited and stressed he had little to no knowledge of who Nair is.

Borg declined to comment on the payments to Piscopo but said he has never met or had any dealings with Nair.

Spanish connection

The Kappara junction and bus service contracts were won by Spanish-led contractors.

A consortium led by Constructora San Jose SA won the tender to build the Kappara junction in 2015.

Around the same time, Autobuses de Leon was selected to manage Malta Public Transport, the operators of the public transport system.

Apart from heading Transport Malta, Piscopo also chaired the tender evaluation committee that led to the selection of Autobuses de Leon.

Suspicions about Nair’s “involvement” in the two projects were raised when investigators found Constructora San Jose SA and Malta Public Transport wired a total of €5.1 million from Malta to Spain between 2015 and 2018.

The money was allegedly transferred to two Spanish companies, Hasaura Real Estate SL and Translock IT, which are run by the nephew of a former Spanish MP charged with corruption in foreign contracts.

Pedro Ramón Gómez de la Serna and another former MP, Gustavo de Arístegui are both facing charges in Spain of heading a criminal organisation to help acquire foreign contracts.

Serna’s nephew, Luis Carlos Yanguas, who is not facing criminal charges, is alleged to have acted as a ‘commission agent’ for Voltar Lassen, a company owned by Serna and named in the Spanish case.

ALSA, a company affiliated with Malta Public Transport, is mentioned in the Spanish indictment as a ‘client’ of Voltar Lassen. Constructura San Jose is also mentioned as another ‘client’.

From Spain to Hong Kong

Investigators allege that, from Spain, portions of the money were moved to bank accounts in the United Arab Emirates and Hungary held by Aitken Spencer, a Hong Kong company that investigators linked to Nair.

The investigation traced a further €2.3 million in payments between 2014 and 2020 that passed from Aitken Spencer to Maltese companies owned by Nair.

Nair declined to comment on specific payments when contacted.

“I am a private businessman and not a public servant. Moreover, and, perhaps more to the point, my companies have always conducted their activities in Malta and elsewhere in a regular and lawful manner and do not need to provide explanations with respect to their legitimate dealings,” Nair said.

Nair said he was only appointed as an adviser to Malta Enterprise for a “brief period”, in connection with a specific investment strategy for the island. “The appointment was very short-lived and was terminated by mutual agreement once my input was no longer required.”

A spokesperson for Autobuses de Leon said the payments to Hasaura Real Estate SL and Translock IT were part of a service contract signed by Malta Public Transport to optimise the management of its fleet.

The contract was initially signed with Hasaura Real Estate SL and then transferred to Translock IT, a wholly owned subsidiary of Hasaura, the spokesperson said.

The spokesperson said Translock IT is a company that provides advanced technological solutions for efficient management of public transport fleets, including real-time route monitoring systems, route optimisation and data analysis to improve operational efficiency.

Autobuses de Leon has never had any dealings with Nair and is “completely unaware” of any subsequent money transfers to companies affiliated with him, the spokesperson said.

A spokesperson for Malta Public Transport said the payments to Hasaura Real Estate SL and Translock IT had nothing to do with the awarding of the public transport concession, which was won through a competitive process.

Malta Public Transport never had any relationship with Nair, the spokesperson added.

ALSA, the Spanish company affiliated with Autobuses de Leon, said it did not apply for the tender in Malta and does not manage the bus service.

Meanwhile, a spokesperson for Constructora San Jose SA said the company always acts within the strictures of the law.

Serna, the ex-Spanish MP, acknowledged that he had come across Nair in Columbia on an unrelated project that was never carried out.

Speaking via his lawyer, Serna said he is unaware of any business Nair may have carried out with his nephew.

Serna said the “commercial relationship” between himself and his nephew ended in April 2013, years before the payments in question.

The ex-MP’s nephew, Luis Carlos Yanguas said the payments involving his companies Hasaura Real Estate SL and Translock IT had nothing to do with his uncle.

Yanguas said the payments were part of a “client-supplier relationship” and were backed up by all the necessary documentation and agreements.

A spokesperson for Transport Malta said that both the Kappara project and the Malta Public Transport contract were audited by the European Commission and the National Audit Office respectively.

‘Vital’ warning

Nair’s name also crops up in a magisterial inquiry into the Vitals hospitals deal overseen by Muscat’s government.

The inquiry traced an e-mail Nair sent to Muscat “as a friend”, detailing “serious doubts” that were raised about the background of Vitals director Ram Tumuluri.

According to the inquiry, the e-mail also questioned how Vitals was awarded the hospitals contract, who carried out the due diligence and questioned the “sham” bidding process.

The e-mail was forwarded by Muscat to Schembri, who forwarded it to then health and energy minister Konrad Mizzi.

Citing media reports and open-source research, the inquiry said Nair had set up a meeting with the Qatari oil minister and had accompanied Mizzi on a trip to Qatar in 2013.

Muscat, Schembri and Mizzi have all been charged with corruption in the hospitals deal.

They deny wrongdoing.

PN: Police Commissioner hijacked by Robert Abela

The Nationalist Party in a reaction to the story on Tuesday said Police Commissioner Angelo Gafà must immediately inform the people about the status of this investigation and what action will be taken against key figures within the Labour Party.

"Every contract awarded by the Labour Government seems to be tainted by corruption – now even the Kappara junction project and the public transport concession. It is unacceptable that scandal after scandal arises, yet no one is held accountable."

The party said these findings further confirmed Robert Abela’s urgency in shutting down all forms of scrutiny directed at him.

The statement was signed by Mark Anthony Sammut, shadow minister for transport, Shadow Minister for Transport and Claudette Buttigieg, shadow minister for public administration.