Chairman resigns, slams government

Sea Malta chairman Marlene Mizzi resigned yesterday and launched a fierce attack on the government over its decision to sell off the company.

In a hard-hitting letter to Prime Minister Lawrence Gonzi, Mrs Mizzi said the decision to dispose of the country's only shipping line - "after the government has effectively abdicated its responsibilities to the company for all these years - was foolish and short-sighted."

The government signed a memorandum of understanding for the transfer of Sea Malta shares to Atlantica S.p.a. di Navigazione, a company forming part of the Italian Grimaldi Group last Wednesday.

Mrs Mizzi said the financial results of a company of strategic importance should not be the only consideration made by a government in taking such drastic decisions.

"The requirements of local industry and Malta's economy were, and should be, the raison d'être of the national shipping line of an island state. Malta will now become just another port of call for the new owners and we shall only know too late what the consequences of handing over of one of Malta's strategic activities to a foreign shipper are, on the economy, on Malta's competitiveness and on industry," she wrote.

In a letter to Mrs Mizzi yesterday, the Prime Minister accepted her resignation and gave the government's rationale for the sale of Sea Malta. Dr Gonzi called on her to "look beyond the narrow view of an organisation with its own instinct to survive and at the bigger picture of the national interest".

Ms Mizzi said she had remained in her post in the hope of providing a counter-balance to the determination to dismantle Malta's national shipping line - "an entity that many believe is of strategic importance to this island state".

She told the Prime Minister that when Sea Malta fell under Minister Austin Gatt's portfolio, it was immediately evident that the line had no future. "In May 2003, during a meeting at Sea Malta, Minister Gatt informed the company that the capital injection requested from the government was actually turned down 'some four years ago' and was never meant to be - a statement which took everyone by surprise. If this is correct, then the board and the company had been misled by the very shareholders they represent."

Mrs Mizzi said she continued to do her utmost for the company with the result that no jobs were lost and with financial results showing profitable operations.

"This has only been achieved by leading the company in a 'business as usual' manner, exercising strict control on expenditure, reducing administration costs by five to six per cent per annum, and retaining the lion's share of the market - in spite of the bleak prospects presented by passive, and at times hostile, shareholders," she wrote.

Mrs Mizzi said the government acknowledged none of these achievements.

"On the contrary, it has been most evident, particularly in this last year, that the intention of the government was to dispose of, or dismantle the company. The only justification given for this decision is that it is a loss-making company! Minister Gatt's speech in the House of Representatives on April 29, 2004, gave a misleading picture of Sea Malta, which may have distorted any valid arguments for or against its sale.

"Subsequent other references to Sea Malta in the media, including recent interviews and statements from the ministry, have done nothing but portray the company as an inefficient and useless company, which is a great burden on the taxpayer. This wrong and misleading information meant to justify the disposal of the company has caused real damage to the company's commercial activities as well as to its image. Furthermore, the responsibility of making such statements on the company during negotiations currently undergoing with a potential buyer is highly questionable."

She said Dr Gatt's recent statement, that should privatisation fail he would close the company down, left no doubt as to the government's ultimate aim and of the sad fact that the future of this company was doomed.

"This damaging revelation of the government's strategy has now been made public with complete disregard for the company's commercial interests, responsible negotiating skills, the sentiments of the company's employees, as well as the professional capabilities of the company directors."

Mrs Mizzi said that the re-structuring report, which Dr Gonzi had requested and which was forwarded to him in July 2004, shows that, with the right measures, a turnaround of the company to a profitable situation could be achieved. She said the management accounts, which she forwarded to him regularly, substantiate the data of this report.

"Notwithstanding all this, I have had absolutely no feedback at all. Evidently this information was not considered relevant. Please note that this report was eventually forwarded to MIMCOL in December 2004, who also chose to ignore it."

She said the numerous reports and studies undertaken by the company since 1999, concerning restructuring, solutions for viability as well as communications relating to the problems which under-capitalisation would cause, had been ignored.

"Notwithstanding the total lack of support - financial and otherwise - by the government and other shareholders, we have managed to provide an impeccably reliable service to this nation and its industry, retain and increase our market share, as well as preserve, and invest in, our human capital.

"We have also continued paying salaries, bank interests and numerous other creditors, from revenue generated solely from the company's own activities. Will this be the 'inefficiency' mentioned in the several statements by the government in justification for disposing of the company?" she asked the Prime Minister.

Mrs Mizzi said she could no longer represent a shareholder "who has disregarded Sea Malta's financial requirements, who has ignored all constructive efforts to save Sea Malta, and who is abdicating its responsibilities and control over a company of strategic importance. This goes against my principles and good sense both as the chairman of this company and as a citizen of this state."

The government's attempt to sell its shares in Sea Malta has also come under severe criticism from the opposition.