I find it difficult to agree with one of the final conclusions of the Mamo TCV report on the Montenegro wind farm which commended Enemalta for not implementing the project blindly.

The irrelevant and superfluous statement in the report, that some of the Enemalta directors might not have possessed the all-round degree of competence and experience, would on its own have been enough to exonerate these directors of any bad judgement were it not for the accepted rule that company directors, after approving a recommendation, cannot later claim that they were not competent to do so if things go wrong. This runs parallel to the maxim that ignorance of the law is no excuse.

The immediate and basic function of the investigating board was to see whether the Enemalta directors failed to ask why the consortium was paying €10.3 million to buy shares from Cifidex (owned by Turab Musayev), which same shares were traded at €2.9 million a few weeks before, and how Musayev/Cidifex, a company that did not have the funds to buy the shares in the first place, managed to triple their value in a short time.

But then, there was no need to ask as it is the net worth of the company as shown in the audited accounts at the time of purchase that counts, more than woolly unsupported statements. Moreover, like Yorgen Fenech, Musayev sat on the Enemalta board and the two were doing business together. Would this not have been enough to trigger more questions?

The report highlighted the fact that the chairman and the directors inexplicably accepted to include a clause in the agreement that protected Cifidex from any possible future allegation of overpayment i.e. an overvaluation of the shares. Why was this necessary?

It seems that Cifidex were afraid that the figure of €10.3 million would be queried at some future date. This arrangement was quite exceptional. In fact, the investigators remarked that they had never encountered a similar clause in a contract although, in effect, it was quite similar to the €100 million guarantee given to Stewards Hospitals.

If at all, this arrangement should have been the other way around. Enemalta should have insisted on having protection for any overpayment it was making for the shares.

Moreover, before approving the purchase of the shares, did the Enemalta directors request to see the due diligence report on the holding company or a recent copy of the audited accounts?

Did they check whether it was possible to find out the latest price at which the shares were traded?

Was the recommendation “to buy” assessed by the Enemalta chief financial officer? What did the projections (the prospects) look like? Was his recommendation attached to the board papers for posterity’s sake? In other words, how did they get to the figure of €10.3 million? What did the payment of €4.7 million “share of profits” to 17 Black represent?

Why were the directors so reticent? Were they trying to cover up what happened?- Joe Pace Ross

These are questions that can be better answered by top-notch accountants rather than lawyers.

Konrad Mizzi was said to be the man behind the project. But he could not get this transaction past the Enemalta board and possibly the cabinet on his own. Surely there were other powerful people in the know close to him.

The report added that they were unable to source the minutes of the board, that Enemalta gave only limited information to work with, that e-mails from Enemalta’s board members were unavailable, and that they were unable to conduct electronic searches in Enemalta’s computer.

Why were the directors so reticent? Were they trying to cover up what happened at the time? Quite a confusing story.

Even Joseph Muscat (who was in Montenegro with his ministers and consultants), when interviewed by Herman Grech (The Sunday Times of Malta, August 6, 2021), declared: “I still don’t understand the issue of Montenegro wind farm. I cannot put two and two together there.”

Despite the foregoing events, the report went a step further and commended Enemalta for not implementing the project blindly!

No, I cannot concur with the Mamo TCV report. From what is known so far, I feel that the directors should have asked more questions.

But now that Minister Miriam Dalli passed on the full and complete report to the police commissioner some two years ago without much ado, as if it was a hot potato, we must await for the latter to take long overdue action.

It is €10 million of our money that we are talking about. 

Joe Pace Ross is a former banker.