Brothers of oil trader George Farrugia acquitted in oil scandal case

The five brothers of rogue oil trader George Farrugia have been acquitted of complicity in the oil procurement scandal that rocked Maltese politics over a decade ago.

The decision, handed down on Tuesday by Magistrate Yana Micallef Stafrace, marks a major development in the long-running case.

George Farrugia, the oil trader at the heart of the scandal, was granted a presidential pardon in February 2013, promising to turn state witness and disclose the truth about the affair to investigators.

The revelations surfaced just weeks ahead of the 2013 general election, quickly becoming a defining event of the electoral campaign. 

Farrugia stood accused of paying commissions and kickbacks to people connected with Enemalta’s fuel procurement processes, particularly through his role as a local intermediary for oil giants Trafigura.

Investigators, including current police commissioner Angelo Gafá, believed that Farrugia used to bribe Enemalta officials with the full knowledge and consent of several of his brothers.

The brothers were George Farrugia’s business partners and directors and shareholders in two companies, namely John’s Group and Power Plan Ltd, the company through which he used to deal in oil procurement.

The brothers were eventually charged with complicity in the crime and had their assets frozen in 2015.

Brothers said Farrugia acted behind their backs

The five brothers denied their involvement, arguing that Farrugia had acted behind their backs.

The case had dragged on for several years, even being restarted after the magistrate initially hearing the case, Miriam Hayman, was made judge.

In testimony throughout the case, Gafá said Farrugia had told police that he had issued several payments, including to the then-head of Enemalta’s petroleum division Alfred Mallia, with the full blessing of his brothers.

Farrugia also pointed to bribes handed to other officials, including then-Enemalta chair Tancred Tabone, and gifts to government figures, all issued through Power Plan Ltd.

These included a clock, worth around Lm400 or Lm500 (approximately €930 to €1,160), given to then finance minister Tonio Fenech through the company, the court heard.

However, Gafá told the court police hit a dead end when trying to trace several payments to senior officials.

A company with a Swiss bank account

Farrugia himself testified extensively in proceedings, telling the court that kickback payments were often paid in cash or self-cheques frequently signed by his brothers.

He said he later created a nominee company, named Aikon Ltd, with a Swiss bank account, after an auditor warned him that payments could no longer be issued without a corresponding invoice.

However, Farrugia admitted that his brothers were not aware of the existence of Aikon Ltd, telling the court “I admit that I was not transparent enough with my brothers”.

Meanwhile, the brothers themselves told the court that they each handled a separate part of the Power Plan business, arguing that their field was unrelated to oil procurement.

Emanuel Farrugia said his work dealt with transport and chauffeur-driven cars, not oil trading, while Salvu Farrugia said he worked as a mechanic. The other brothers, Raymond and Gaetano Farrugia also told the court that their work had little to do with oil procurement, insisting that they were unaware of the payments issued by their brother George.

A fifth brother, Anthony, did not testify in proceedings.

George Farrugia’s ‘selective’ testimony

The court accepted the brothers’ version of events, finding that the only one who could have had an overview of operations was Raymond. Nevertheless, the magistrate said, it remained unclear whether he knew about what was truly happening across the company.

Ultimately, the magistrate cast doubt on George Farrugia’s testimony, describing it as “selective”.

“While he testified in detail about certain things, he forgot other relevant details, such as the name of the auditor and accountant who told him to stop paying in cash and self-cheques,” the magistrate said.

The five brothers were “not aware of what was happening in Power Plan Ltd,” the court ruled, finding that they were under the impression that its primary business was importing lubricants.

The court also believed the Farrugia brothers’ testimony that they were unaware of the existence of Aikon Ltd, describing George Farrugia’s claim that payments were issued with their blessing as “not credible”.

The court cleared the five Farrugia brothers of all charges, revoking the freezing order that had been imposed upon them in 2015.

Lawyers Joe Giglio and David Farrugia Sacco represented the defendants.