Malta Enterprise’s chief financial officer outlined how the state agency granted Progress Press €1.5 million in aid between 2013 and 2017 when he testified in the case against Adrian Hillman on Tuesday.
Joseph Zammit told a court that Progress Press had initially applied for a €1.1 million grant as well as an interest subsidy, to help it invest €5.5 million in printing machinery.
The letter requesting the aid was sent to Malta Enterprise CEO Mario Vella by then Allied Group managing director Hillman and Progress Press managing director Michel Rizzo.
Hillman faces charges of money laundering, fraud and other financial crimes. Rizzo is being charged in a separate case as a director of the company, although charges against him in a personal capacity have been dropped. Allied Group is the publisher of Times of Malta.
Prosecutors allege that Progress received around €700,000 more than it was entitled to in aid from Malta Enterprise by including consumable expenses in its application when it should not have done so.
A separate court has also heard that prosecutors believe Progress spent millions of dollars more on buying printing machines from Kasco than it should have, with suspected backhanders being traced to accounts controlled by Hillman, former Progress Press chairman Vince Buhagiar, Kasco owner Keith Schembri and Schembri's business partner Malcolm Scerri.
Testifying as Hillman looked on, Zammit explained that all applications for grants made to Malta Enterprise went through his department. In such cases, applications were vetted by the valuation department and referred to the board of directors. Once approved, a letter of intent is sent out. Money is disbursed once the company makes its capital investments, based on a business plan, Zammit said.
He said that after its initial application, Progress Press had subsequently informed Malta Enterprise that it would not be applying for the interest subsidy portion of the aid. The grant was subsequently bumped up to €1.6 million, although the final figure was later revised down to €1.5 million after Progress Press provided it with updated information.
Progress Press paid Kasco Ltd for the printing machines in instalments made between 2013 and 2017, Zammit said.
On-site inspections by Malta Enterprise confirmed the machinery that the company had applied for had been installed and was functioning.
The bulk of payments made by Malta Enterprise to the company took place in 2013 and 2014, with others in 2017 and a final payment in 2019.
The case continues on October 22.
Stefano Filletti, Mark Refalo and Nicole Galea represented Hillman.
Inspectors Joseph Xerri and Leanne Bonello prosecuted, assisted by attorney general lawyers Antoine Agius Bonnici, Sean Xerri de Caro and Andrea Zammit. Superintendent Frank A Tabone was also present.
Chris Cilia assisted the witness.