Updated 1.32pm
A company with past ties to Keith Schembri was cleared of all criminal charges related to the Vitals deal to privatise three state hospitals on Tuesday.
Sciacca Grill, which operates eponymous restaurants, was discharged from proceedings after Magistrate Rachel Montebello concluded that prosecutors had failed to present enough evidence to justify the company’s inclusion in criminal proceedings.
The company was the only one of the 14 defendants discharged. The criminal case against all others, including former prime minister Joseph Muscat, his minister Konrad Mizzi and chief of staff Keith Schembri, must continue, the magistrate ruled.
Sciacca Grill was previously known as Kasco Foods and owned by Keith Schembri, Joseph Muscat’s former chief of staff. But Schembri sold the firm in 2014, the court heard last week.
Prosecutors argued that the company had skimmed money off contracts it received to supply state hospitals privatised by Vitals Global Healthcare and that Schembri still played a hidden role in it.
But the company, represented in court on Tuesday by lawyers Franco Debono and David Bonello, argued that the prosecution did not produce a shred of evidence to substantiate its claims.
Following deliberation, the magistrate concluded that the defence was right.
Even if the company truly benefited from contracts linked to the hospitals concession, no proof was presented to link it to Schembri or any criminal activity, the magistrate said as it discharged Sciacca Grill Ltd.
Sciacca Grill's Valletta location. Photo: Jonathan BorgDefendants stand accused of having played major parts in a national, multimillion-euro fraud as part of a 30-year deal to privatise three state hospitals.
That deal was awarded to Vitals Global Healthcare, a firm with no business history or experience in the healthcare sector, by the Muscat-led government. The concession was then transferred to US healthcare firm Steward Health Care before a civil court annulled it last year on the basis of fraud.
Muscat and other defendants were arraigned on criminal charges on the back of a years-long magisterial inquiry into the deal.
Sciaccia Grill's legal team, led by Franco Debono (centre) included lawyers David Bonello and Marion Camilleri.During Tuesday’s hearing, defence lawyers representing various companies and individuals charged with crimes took turns to poke holes in that magisterial probe.
They all argued that the inquiry made allegations without backing them with evidence.
“Never let the truth get in the way of a good story,” quipped lawyer Chris Cilia in defence of his client MTrace Ltd.
One defence lawyer, Jason Grima, argued that his client Jonathan Vella was just an accounts clerk employed by auditor Chris Spiteri. He had no special role and was just an employee, but ended up facing criminal charges alongside all the others including Spiteri, he noted.
Another lawyer, Arthur Azzopardi, argued that his client Brian Bondin was only linked to “potential” fraud and that the inquiry made no effort to substantiate those claims.
Azzopardi made similar arguments for companies he is representing in the case – Technoline and Gateway Solutions. Court-appointed experts, he argued, were unable to agree on what exactly Technoline did wrong, he said, and everything Gateway did was always above board and vetted.
The case continues on August 1.
As it happened
Sciacca Grill discharged
1.11pm The magistrate quickly reads through her decree’s final section. It notes that various banking records are required to determine the links between the defendants and alleged wrongdoing, but ultimately concludes that all defendants except for Sciacca Grill should face trial on indictment.
Sciacca Grill is therefore discharged from proceedings. The company’s owners will be uncorking a special bottle this evening.
The case will resume on August 1.
As it happened
Live blog ends
1.32pm This live blog ends here. We've update the top of this article with a summary of the court hearing's key points. Thank you for having joined us.
All defendants bar one have a case to answer
1.08pm After seeing the evidence, relevant acts and evidence, on prima facie basis, everything points to all defendants having allegedly played a part in some wrongdoing, bar one - Sciacca Grill.
Magistrate in court
1.05pm Magistrate Montebello is back in court, and she comes with a warning.
The decree she's about to read is "rather voluminous," she tells those present in court. But, she adds, she will only read the final part in court.
What will happen when the magistrate returns?
12.24pm We mentioned it earlier, but it bears repeating: a prima facie decree is a court decision that there is enough evidence against a defendant for the case against them to proceed.
As one of the defendants’ lawyers was at pains to note during today’s court hearing, the standard of proof at this stage is [obviously] fairly low. Still, various defendants facing criminal charges here have argued that prosecutors have failed to clear even that low bar of evidence.
If Magistrate Montebello agrees, she could decree that some of those defendants do not have a case to answer, and free them of any criminal liability.
A 45-minute pause
12.14pm And with that, Magistrate Rachel Montebello suspends the hearing for 45 minutes. When she returns, it will be with a prima facie decree.
Naughty shareholder, naughty company?
12.08pm Azzopardi says that while Ivan Vassallo was not contesting the prima facie case against him, his company Technoline was.
“If a company shareholder was naughty, then he should answer for it, not the company. This company employs 57 people and supplies one-third of the country’s medical equipment,” Azzopardi says of Technoline.
Eurybates, unlike Technoline and Gateway Solutions, is not contesting the prima facie case against it.
Azzopardi: Experts couldn't even agree among themselves
12.02pm Azzopardi raises questions about the inquiry experts’ credibility.
These experts spent four years working together, and they couldn’t even agree on Technoline’s criminal liability, he says. Different experts drew different conclusions about the company’s alleged illegality, he notes.
Gateway 'did nothing wrong'
11.59am Azzopardi can now make submissions on behalf of Gateway Solutions [the company that Vassallo used to buy Technoline, his previous employer].
Gateway was not set up to acquire Technoline, its lawyer argues, and everything it did, it did legally. The loan it got to buy Technoline shares was paid and vetted by a major law firm, he says. The inquiry does not produce any evidence that the company did anything wrong, Azzopardi adds.
Technoline, Gateway, Eurybates get their lawyer back
11.48am The court switches gears and refocuses onto the issue of lawyer Arthur Azzopardi getting paid for his work by three of the companies facing charges.
The crux of the issue is that one of the firms, Technoline, usually covered the legal expenses of the other two, Gateway and Eurybates. But Technoline, like the other firms, is subject to a freezing order. And the administrator appointed to run the companies has decided that company money should not be paid out.
That means Azzopardi might not be getting paid for his work to represent the firms, prompting him to denounce the brief. But it appears the magistrate has found a solution: Azzopardi will file an application requesting payment, and Eurybates and Gateway will file a court application of their own.
And with that, the three companies get their lawyer back.
Vella quit Bluestone in 2016
11.36am Grima goes on: As an accounts clerk, Vella had no professional duty to flag anything to the inquiry. And yet he’s being charged in his personal capacity.
Vella resigned as Bluestone company secretary in November 2016 and was replaced by [Vitals director] Ram Tumuluri. “And yet Tumuluri has not been charged as far as I know,” Vella’s lawyer notes.
Emails cited in the inquiry involving Vella had nothing to do with negotiations or contracts. And the only audit concerning Bluestone happened in 2018, when Vella was no longer involved, his lawyer argues.
Jonathan Vella 'was just an accounts clerk'
11.30am Lawyer Jason Grima, representing Jonathan Vella, makes similar points regarding his client. The prosecution has presented no evidence of his criminal wrongdoing and the inquiry included no appendices regarding him, Grima argues.
Vella worked for auditor Chris Spiteri, but he was just doing his job, his lawyer said.
It was reported that Vella was a lawyer or auditor. But that was not correct, his lawyer argues.
“He’s simply an accounts clerk at Spiteri’s office,” Grima says, adding that Vella was tasked with serving as company secretary to Bluestone Investments [Vitals’ parent firm].
“Vella didn’t choose to act as secretary. He did the job and was not paid as secretary,” Grima says. All Vella got was his regular salary.
And the inquiry did not bother to hear him out. “No one sent for him, no one questioned him. Nothing at all. When a person is stopped over a driving offence, a lawyer is consulted, even at 3:00am. Yet no one sent for Vella or gave him a hearing.”
Bondin quit MTrace in January 2018
11.23am Bondin was a former MTrace employee who quit the company in January 2018. Azzopardi notes that his client then “filed court proceedings” [presumably against MTrace itself].
The magisterial inquiry links him to “potential fraud” in 14 sentences but does not provide the financial data to back up those claims, he says. Prosecutors say they will need some time to reply.
Bar of proof against Bondin 'too low'
11.16pm Azzopardi makes his points: experts in the inquiry concluded that there was the “potential” that Bondin had committed fraud. “Potential” was too low a bar for the court, his lawyer argues – at the prima facie level, the court must conclude that defendants’ level of guilt lies between the “possible” and the “probable”.
There was no appendice to the inquiry regarding Bondin, Azzopardi notes, despite one court expert attributing a €600,000 payment to him.
“She said it, but never backed up her argument,” he says. “The experts only focused on MTrace.”
Lawyer wants to get paid
11am The hearing resumes, and we're at a similar stage to where we are when it was suspended.
Lawyer Arthur Azzopardi makes it clear that he renounced his brief as lawyer of Technoline, Eurybates and Gateway because he's concerned he will not get paid for work he did.
He says that if he won’t be paid for the criminal proceedings, he has no option but to renounce. "No one does work for nothing. Even the court marshals in the corridor get paid," he says.
Azzopardi wants the court to reverse a decree it issued, to allow him to get paid.
The magistrate, who seems quite unimpressed by the matter, orders a copy of that application to be served to prosecutors. And now the case can proceed - Azzopardi will make submissions on behalf of Brian Bondin.
Hearing still suspended
10.45am We're still here! The case is still suspended. The live blog will resume as soon as the magistrate returns.
Lawyer gets a telling off: 'That's not the way to treat a client'
10.35am Lawyer Arthur Azzopardi wants to make submissions on behalf of Brian Bondin. But the magistrate gives him a telling off first.
He quit a client without informing the client about it, she says. That’s not the way to treat a client – professional ethics require otherwise.
The magistrate suspends the hearing for a few minutes, telling Azzopardi she is doing so to give him time to discuss the matter with Ivan Vassallo, whose companies Azzopardi no longer wishes to represent.
MTrace lawyer: 'They invented a narrative'
10.22am Lawyer Chris Cilia says the inquiry created a “narrative” surrounding the company he’s representing, MTrace Ltd. “It’s a narrative they invented,” he says.
The inquiry concluded that [Saint James Hospital owner] Josie Muscat was a front for Shaukat Ali and that MTrace was set up to control the Cyclotron project in 2015. But Josie Muscat testified that the idea for the project came much earlier, Cilia says, noting that the magisterial inquiry had never asked Josie Muscat to testify.
Instead of hearing him out, investigators told a "fairytale," the MTrace lawyer argues.
He then uses a Mark Twain witticism to hammer his point home.
"Never let the the truth get in the way of a good story," he says.
Sciacca Grill and Keith Schembri
10.17am Prosecutors Francesco Refalo makes some arguments regarding another company facing charges, Sciacca Grill. The company was formerly Kasco Foods, owned by Keith Schembri.
Refalo says the company got multiple public contracts, including one to supply the privatised hospitals. The company skimmed money from the hospitals concession, the prosecutor says.
Defence lawyers have argued that Keith Schembri quit the company in 2013. But the prosecutor argues that just because he was not part of the company structure, it does not mean the company was not under his control. The magistrate also ordered charges to be filed against Sciacca Grill, he says.
The company’s lawyer, Franco Debono, immediately objects. The prosecution did not produce a shred of evidence to substantiate its claims, he says, citing case law in which charges were dismissed at the prima facie stage due to a lack of evidence.
Taomac: Malta Enterprise told us to transfer to Vitals
10.10am Dalli says Taomac was instructed by Malta Enterprise to move out of the Cyclotron project. The company then had two options: lose its €62,500 investment or transfer its ownership to another company.
Malta Enterprise told it to transfer its shares to Vitals Global Healthcare, Dalli says. Why should the company have second-guessed or doubted Malta Enterprise? Why should Taomac have suspected anything untoward?
Serbian court expert's role
10.06am Lawyer Veronique Dalli, whose client Taomac Ltd is contesting the prima facie case against it, tells the court that the only mention of Taomac in the inquiry was by court-appointed expert Miroslava Milenovic.
Milenovic has played a key role in various complex inquiries in Malta: in 2023, one of the defendants in this case, Keith Schembri, argued that she was biased as she held a political role in an anti-corruption party in her native Serbia.
Irritation at Jason Azzopardi's Facebook posts
10.02am There’s some irritation by defendants about what they feel is a double standard at play.
Lawyer Chris Cilia says that while defendants have been very carefully respecting the magistrate’s order to not comment on the case, the same cannot be said of Jason Azzopardi, who has been busy commenting on Facebook.
Magistrate Montebello says he should file a court application about that.
Cilia is prickly about it: OK, he says, we will file one. But the person who wrote on social media went ahead without a court application. “This cannot go on,” he says.
Technoline owner caught by surprise
9.56am Well, this is awkward. Ivan Vassallo, who is intrinsically linked to the three companies that Azzopardi no longer wishes to represent, says his lawyer's decision to quit that brief has caught him by surprise.
He tells the court he does not have the means to appoint a lawyer to represent the companies. So now they will be represented by a legal aid lawyer.
Lawyer Arthur Azzopardi quits company brief
9.53am The hearing begins, and it starts with lawyer Arthur Azzopardi informing the court that he is renouncing his brief as lawyer of Technoline, Gateway and Eurybates - three of the companies facing charges.
He will remain involved in the case as the lawyer representing Ivan Vassallo and Brian Bondin.
What's the next stage?
9.51am The first stage of the case was the arraignment, when defendants pleaded not guilty to criminal charges and the court imposed freezing orders on their assets.
We've now moved to the pre-trial stage, where the magistrate is hearing evidence collected against the defendants and deciding whether it is sufficient for the case against them to proceed.
By law, the court has 30 days to do so. And that deadline is getting awfully close in this case.
If Magistrate Rachel Montebello decides that the case should proceed, she will issue what is known as a prima facie [at first glance] decree - essentially a legal statement that there are sufficient grounds for defendants to undergo criminal proceedings.
We might get a prima facie decree today.
If/once the court does so, the compilation of evidence stage continues as normal. And then a second, albeit longer, clock starts ticking: prosecutors have 20 months to finish presenting their evidence against the accused and file a bill of indictment.
Welcome
9.47am Good morning and welcome to this live blog. It's a packed courtroom, and how could it be otherwise? There are 14 defendants, their lawyers, prosecutors, journalists and onlookers all crammed into the room, which is the largest courtroom in Malta.
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