Brian Tonna told a parliamentary committee assessing the Electrogas deal that he did not carry out due diligence on its offer to build a power station, despite being involved in adjudicating bids for the public contract.

The Nexia BT managing partner was replying to questions by parliament's Public Accounts Committee one week after refusing to answer questions before that same committee, claiming he may be a suspect in ongoing police investigations. 

Tonna said his role and that of two other company employees was to “input data” during the fourth stage of the process, a financial evaluation that took several days to complete.

The financial evaluation, Tonna told the Public Accounts Committee, was not an interpretative one, but one that was automatically generated through a pre-existing financial model. 

Admitting he had no previous experience in projects of such magnitude, Tonna said he was also involved in the fifth, adjudicating stage which had chosen the cheapest bid.  

Times of Malta had revealed in April 2018 that Tonna and three of his Nexia BT staff members sat on sat on the committee that selected the Electrogas bid. 

Tonna, who is facing money laundering charges over transactions he made with former OPM chief of staff Keith Schembri, was answering questions by the PAC chair, Beppe Fenech Adami.

Fenech Adami described an Auditor General probe that had flagged the due diligence process as one that was “not sufficiently robust”. 

According to the NAO report, verifications relating to fraud, bribery, corruption, internal controls, risk management considerations, ethical conduct and other governance issues did not form part of the due diligence carried out.

But on Wednesday Tonna said due diligence was not within the remit of his team.

Ruling to be challenged in Constitutional Court

During the grilling, Tonna repeatedly said he could not remember details about the process, including who was present at the adjudicating meetings.

He also refused to answer questions about his relationship with the disgraced Schembri, on the instruction of his lawyer Stephen Tonna Lowell.

Last week, when Tonna refused to answer all of the committee’s questions, Fenech Adami had turned on the Speaker, pointing out that while there were legal proceedings against Tonna regarding alleged money laundering involving Allied Newspapers and alleged kickbacks in the sale of passports, the committee did not know of any criminal proceedings against him over the Electrogas contract.

In return, Speaker Anġlu Farrugia ruled that witnesses summoned before the committee have a right not to reply to questions that may incriminate them, but they were bound to reply to questions about which no criminal charges had been made against them. 

But on Wednesday Tonna Lowell asked for Tonna’s testimony to be postponed as he planned on challenging the Speaker's ruling in the Constitutional Court. 

Nexia BT is the financial advisory firm that set up the secret Panama companies for former minister Konrad Mizzi and Schembri.

Tonna denies conflict of interest 

In his probe, the Auditor General had investigated whether Tonna’s role in the power station selection process constituted a conflict of interest, as Nexia BT served as auditors for GEM, the company through which Tumas Group, Gasan Group and CP Holdings hold their shares in Electrogas.  

Asked by the PAC whether he felt there was a conflict of interest from his end, Tonna said on Wednesday that the audit and advisory departments within Nexia BT were separate, and he had not seen any audits or accounts for GEM Holdings. 

During the grilling, it was pointed out to Tonna that Nexia BT was involved in the three most crucial stages (out of five) of the process that ultimately awarded the Electrogas deal.  

However, Tonna insisted that he was not briefed by his Nexia BT colleague Anita Aloisio about what went on in the third stage of the process, which revolved around “additional requirements”.

Brian Tonna and his lawyer Stephen Tonna Lowell. Photo: Chris Sant Fournier

'Relationship with Mizzi three years after election'

Tonna also told the PAC that he had little contact with the Labour Party before it was elected to power in 2013.

He had only met Schembri and former prime minister Joseph Muscat socially at informal meetings.

The then Opposition leader would ask him for information about the financial sector, such as information about the MFSA chairperson. Meanwhile, people from the financial sector would urge him to ask Muscat to protect the industry. 

Asked why people considered him a “bridge” with PL, Tonna defensively replied “are you implying that I was not capable?”

He also claimed to have been introduced to Mizzi just before the 2013 election by someone he refused to mention by name, pointing out that his professional relationship with the minister started three years after PL was elected to power.