Revealed: The ‘suppressed’ report at the heart of the Fortina deal
Report flagged how €8.1 million valuation was for less than half the land in question
A “suppressed” report at the heart of the Fortina scandal pointed out omissions in the Lands Authority’s €8.1 million valuation of seaside land in Sliema.
The report by auditors Grant Thornton, being published in full by Times of Malta, spelt out in an annex how the Land Authority’s internal valuation only considered less than half the land that should have been valued.
While the authority’s internal valuation was for 565 square metres of land owned by Fortina, Grant Thornton's took the full 1,190 square metres of land that Fortina was asking to redevelop into residences and commercial outlets.
Attached files
The public land was originally transferred to Fortina exclusively for touristic use.
Fortina sought to waive these conditions in 2017, asking instead to be allowed to use the land for residential and commercial use.
Grant Thornton noted how the Land Authority’s architects came up with two valuations: one for €8.1 million and a higher valuation of €12.1, which was marked in “draft format”.
It said the architects’ valuation “did not take into consideration” the request for a waiver on 625 square metres of land acquired by Fortina in 1996.
Grant Thornton’s estimated that a minimum value of €18 million – potentially rising to €23 million - should be attached to the land.
The report was dated March 2019, four months before parliament voted in favour of a motion tabled by deputy prime minister Ian Borg to approve the change of use for €8.1 million.
An investigation by the Auditor General published last week found Grant Thornton’s report was “suppressed” by Lino Farrugia Sacco, who used to head the authority’s board of governors.
It further found that the “draft” valuation of €12.1 million was in part reduced to €8.1 million because ex-Land Authority CEO Carlo Mifsud “anomalously” proposed that property tax be removed from the valuation.
A criminal complaint has since been filed against Mifsud, as well as ex-OPM chief of staff Keith Schembri, who was allegedly part of the "wider effort" to suppress Grant Thorntons report.
Farrugia Sacco, who died in 2021, only forwarded the €8.1 million valuation to Borg along with other documents about the proposed deal.
The Auditor General zoomed in on how Borg missed the fact the €8.1 million valuation was only for part of the land in question.
This limitation was acknowledged in the valuation report drawn up by the authority’s architects and forwarded by Farrugia Sacco along with other documents to Borg and his junior minister Chris Agius.
As a mitigating factor, the Auditor General drew attention to how Farrugia Sacco failed to make any “direct reference” in his correspondence with Borg about the incomplete nature of the valuation, and only “vaguely brought up” that the Grant Thornton was still pending, even though it was already in Farrugia Sacco’s possession.
In a statement on Monday, Fortina said under present legislation, it could have obtained the change of use waivers for significantly less than it paid.