Electrogas shareholder Paul Apap Bologna testified on Friday in a public inquiry into the assassination of Daphne Caruana Galizia.
Apap Bologna forms part of GEM Holdings, which owns 33 per cent of the Electrogas consortium that built and operates the Delimara gas-fired power station.
He has recently said he has faith in the project.
A second Electrogas investor, Mark Gasan, was also due to testify on Friday but his inquiry appearance was postponed to Monday.
Highlights from Friday's testimony
Apap Bologna said:
- He did not know that ElectroGas was in default;
- He learnt many things “through the press” such as Yorgen Fenech’s political contacts or that he was the owner of 17 Black;
- He had no knowledge about Fenech’s side businesses nor the Bangladesh project;
- He denied meeting Konrad Mizzi before the project had been awarded;
- He denied a €1 million donation to the Labour Party, saying he “did not donate anything”;
- He did not know that ElectroGas was in default.
- The board questioned the “short timing” to put the project together. The deal was wrapped up in six weeks;
- There were many questions Apap Bologna could not answer, either saying he needed “to go back to check” or that “he was not privy” or did not know.
As it happened
Live blog ends
12.52pm This live blog will end here. Thank you for having joined us. We will have a wrap-up of the day's testimony available shortly.
'Electrogas did not know of Azerbaijan visit'
12.48pm Apap Bologna is asked what he made of Muscat’s unpublicised visit to Azerbaijan.
He says he asked about the visit, but that Electrogas did not even know about it.
“Not even Yorgen Fenech knew about it. We asked Electrogas about it and they said it had nothing to do with us”.
Apap Bologna is told he can step off the witness stand. His testimony is done for today, though the judges tell him that he will be called back to give more evidence.
The inquiry will resume on Monday at 2pm, when Mark Gasan will testify.
Gasol's reliance on Labour victory
12.43pm Therese Comodini Cachia highlights an article published in an international oil publication, featuring an interview with Gasol. In it, the company’s Chief Operating Officer Alan Buxton said that access to the Electrogas project had relied on the Labour Party’s landslide electoral victory.
That was just weeks after the 2013 election, Comodini Cachia notes.
Apap Bologna says she’d best ask Buxton about that.
Here's Caruana Galizia's post about that article.
Apap Bologna denies political donations
12.40pm Azzopardi: “Did you donate €1 million to the Labour Party before the 2013 election?
Apap Bologna: “Absolutely not. I donated nothing.”
Azzopardi: “Are you sure you had no lunch meetings with Zammit Lewis and Joseph Muscat?”
Apap Bologna: “Certainly not Saturday lunches. We met socially”.
Fenech's nest egg?
12.38pm Azzopardi notes that Yorgen Fenech is the sole shareholder of a new energy supply company. Why was that company needed?
Apap Bologna: “He said that he wanted part of the shareholding to himself because he was doing all the work on the project”
Azzopardi: “He never said he was holding that 8 per cent for Konrad Mizzi and Keith Schembri, to use for kickbacks?”
Apap Bologna: “No”.
Azzopardi: “He never spoke of Macbridge?”
Apap Bologna: “No”.
'I did not meet Konrad Mizzi'
12.33pm Azzopardi, reading from another Caruana Galizia blogpost, notes that Konrad Mizzi had said that the power station would cost €376m. How could he know that, and how did he come up with that same figure two months before the election?
Apap Bologna says he does not know.
“I didn’t meet Konrad Mizzi. I’m telling you the truth”.
Azzopardi: “Tell the board abotu lunch meetings Zammit Lewis set up between you and Joseph Muscat”.
Apap Bologna: “I did not attend such meetings”.
Squeezing in insurance
12.30pm Azzopardi notes that there were already concerns about Gasol in early 2014. Apap Bologna says he was not aware of them.
Azzopardi: “Did Yorgen Fenech tell you he was talking to the government about securing a bank guarantee?”
Apap Bologna: “No”.
Azzopardi queries Apap Bologna about the project’s timeframes.
He notes that the witness says he spoke to Labour after it had said it had plans for such a project. Then in April 2013 Enemalta issued its expression of interest. Daphne Caruana Galizia had noted that security risk assessments for such projects, which are required to obtain insurance coverage, take around a year.
“How do you explain the timeline? Was the insurance an afterthought or was it already being handled before?”
Apap Bologna: “I’d have to check. Siemens would have been handling that”.
Judge Lofaro: “You don’t know!”
No knowledge of early meetings
12.20pm Azzopardi reads from the concept paper and asks the witness questions about it.
Apap Bologna tells the lawyer that the document was produced by Gasol. He denies having anything to do with talks, in April 2013, concerning an expression of interest by Enemalta which committed the company to a take-or-pay obligation.
“I don’t know when or who floated that idea, I was not privy to discussions,” Apap Bologna says. He says he does not know whether Electrogas discussed and discarded an onshore option [as opposed to the offshore LNG tanker idea it would eventually adopt].
Apap Bologna tells Azzopardi that it was SOCAR which brought in Gasol.
“Did you trust Gasol?”
“I have a school friend who works there,” Apap Bologna replies. “We became aware of Gasol’s financial situation around 2014, but I’d have to check [for the precise date]”.
Gasol dropped out of the Electrogas consortium in 2015 after running into financial trouble.
Gasan's meetings at Portomaso
12.12pm Azzopardi takes Apap Bologna back to the pre-2013 power station concept paper.
Azzopardi: “The PN government did not take up the proposal. So you didn’t cross over to the opposition?”
Apap Bologna: “Correct”.
Judge Said Pullicino: “I would have expected such a project to be taken to the other side”.
Apap Bologna: “I just didn’t do it”.
Azzopardi: “It was known that Gasan organised business meetings at Portomaso [owned by the Fenech family]. Were you present?”
Apap Bologna: “No, I was not”.
Statement from the Gasan Group: "It has been reported that whilst questioning a witness during today’s public inquiry, Dr Jason Azzopardi asserted that it is a known fact that Joe Gasan was organizing private meetings with then Opposition leader Joseph Muscat and other business leaders at Portomaso, prior to the 2013 election. Mr Gasan declares unequivocally that this is absolutely false and never happened. No such meetings were ever planned or held by Joe Gasan at any time. This assertion is a complete fabrication."
'I may have spoken to Fenech'
12.05pm Jason Azzopardi, representing the Caruana Galizia family, has a few questions for the witness.
The first is about Yorgen Fenech’s resignation as Electrogas director.
Apap Bologna says he offered to step in to replace him.
Azzopardi: “Would it not have been reasonable to ask why Fenech, a great entrepreneur, resigned?”
Apap Bologna: “I didn’t speak to Fenech”.
Azzopardi: “Be careful, mobile data concerning Yorgen Fenech will be coming out”.
Apap Bologna: “I may have spoken to him”.
12pm After a brief five-minute recess, Apap Bologna is called back in to continue testifying.
No idea about Macbridge
11.55am Apap Bologna is asked about Macbridge (a Dubai-based company which was also named, together with 17 Black, as a source of funds for accounts belonging to Keith Schembri and Konrad Mizzi).
"I'm in the same position as you, I don't know about it," he replies.
The court suspends his testimony for a few minutes.
Mark Gasan will not testify today
11.51am The court has decided to postpone the testimony of fellow GEM shareholder Mark Gasan to next Monday. Gasan, who has been waiting outside the courtroom, is told he can leave.
No knowledge of Bangladesh plans
11.50am Apap Bologna again tells the court he had no idea that Yorgen Fenech was “running a side business” with Turab Musayev, or that there were plans to replicate the Electrogas model in Bangladesh. He got to know all this from the press, he says.
When will Electrogas be profitable?
11.48am Apap Bologna is asked if he’s received any money from the project.
He says he received a success fee and other related fees totalling €6.1m, which were reinvested into the company.
He is asked when financial projections indicate that the project will start turnin a profit, and says he would need to check the new projections as “the model has been shifting”.
“The old model said that profits would be made at the start of year five, namely 2023”.
'Gasan has a bigger share'
11.44am Apap Bologna says his business partner Gasan “has a bigger share”.
He is asked whether the two have discussed concerns about the project.
“Since it came out in the press,” he replies.
Apap Bologna says he knew Gasan was to issue a public statement about the project, but insists he did not know what it say [in the statement, the Gasan family said it was looking for a way out of the venture].
Apap Bologna: “We had a meeting to discuss the way forward for the Electrogas project a week to 10 days before Gasan’s public statement”.
“So he didn’t bother telling you?”
Apap Bologna's €9m investment
11.40am Judge Said Pullicino wants to know how big a stake Apap Bologna has in the venture.
Apap Bologna tells the court he has put in around €9 million in total, through a mix of cash, loans and guarantees.
Out of the loop
11.34am Apap Bologna recalls being at a party with Yorgen Fenech after the project secured its funding. He says he cannot recall whether Keith Schembri was there. He is asked whether John Dalli or his sister were present, and says they were not.
The witness is struggling to make himself heard – his voice is down to a whisper.
He is asked whether he knew of the need for a government guarantee and whether the consortium’s bid had indicated that such a guarantee would be needed. He says he would need to check both.
Answering a question, Apap Bologna says he was not involved in meetings with finance ministry permanent secretary Alfred Camilleri. He is referred to a specific meeting which Camilleri testified about in late August.
"No," he says.
“But you said you knew that company was in default!” Judge Mallia remarks.
“No, not at all,” he replies. “I said we needed state aid for financial close”.
Excise tax deal with Enemalta
11.28am Apap Bologna is asked whether the forensic review Electrogas commissioned had delved into the way in which the company had been allowed not to pay excise duty on fuel imports, and whether the auditors had warned that this could breach state aid rules.
“I would have to double check. I understand that [duty] was to be paid by Enemalta. I did not read the RfP in its entirety”.
Apap Bologna says he was not aware that the government would have to absorb the excise tax and only learnt of that through the media.
“Were you not copied in on emails discussing those decisions?
“As you can see, no”.
An Electrogas default and internal emails
11.24am Judge Mallia: “Electrogas defaulted around 2017. It was not doing well. Then it got a government guarantee. We know emails were leaked to Daphne Caruana Galizia. Had she not been killed and those emails were published, what would the situation have been?”
Apap Bologna: “I can’t answer your question. We needed financial closure. The reason we did not get it was because the government had to submit plans to the EU. It needed a green light there. There is nothing incriminating, I have all my emails.”
Judge Mallia: “But her death helped you achieving financial closure”.
Apap Bologna: “But that’s an accusation. The finger is being pointed at us”.
Comodini Cachia reads out from some of these internal emails.
In one, Turab Musayev wrote “we spoke to KM this morning… extension of bridge at this stage is not on the table”.
“The banks are getting nervous,” another read.
Yorgen Fenech in an email: “Today SB said that they will remove tanker from Delimara… we have to hold tight for a week”.
Apap Bologna was not copied in on any of these emails, Comodini Cachia notes. Did he go through them?
Apap Bologna: “I went through stuff about accusations that concerned me. I understand that lenders were not going to lend us money before the [EU] state aid ruling”.
11.14am Apap Bologna is asked about GEM Holdings being set up, eight years ago. Was Nexia BT involved?
“I read about it in the papers,” he replies.
Nexia BT is financial services firm which set up offshore accounts for Konrad Mizzi and Keith Schembri and whose managing partner, Brian Tonna, is embroiled in kickback allegations related to the sale of Maltese passports.
Apap Bologna says his business partner Mark Gasan “is also upset about the allegations”.
Judge Lofaro: “He’s more than upset! He wants to opt out. You don’t”.
Apap Bologna: “I never said that!”
Therese Comodini Cachia reminds the witness that Nexia BT was involved in selecting the Electrogas bid as the winning one for the power station project.
“We discussed it at board level,” he says. “They did nothing wrong and we decided to keep them”.
11.12am Apap Bologna defends Electrogas’ internal audit. He says the company spent a lot of money on the audit, which combed through its affairs “from A to Z” and found nothing wrong.
He’s again reminded of the NAO report that found serious shortcomings in the tendering process.
Apap Bologna says PwC had advised Electrogas to hold a financial and forensic audit of its affairs.
Turab Musayev's resignation
11.07am Others also resigned as Electrogas directors at that time, Apap Bologna is reminded. Why?
“One went on in Siemens group. As for Turab [Musayev], I would have to double-check”.
The board wants to know if he asked Musayev, who represented SOCAR on the board, why he resigned and whether there was any correspondence about it.
Apap Bologna is visibly uncomfortable. “I would have to check,” he says.
Companies belonging to Fenech and Musayev were revealed to have separate business dealings in a wind farm deal in Montenegro earlier this year.
Apap Bologna says Musayev no longer works at SOCAR and that news of that deal came as a “shock”.
'Electrogas had nothing to do with 17 Black money'
11am More questions about the company’s ties to Yorgen Fenech.
Comodini Cachia: "You had faith in him as a director, a lot of investment had gone into the project. If you appointed this person to represent you, how do you expect us to react when you say that you were OK with him continuing on? He resigned and you let it pass. What was so important to risk your investment and reputation?"
Apap Bologna: "It was a media accusation, not a fact".
Judge Mallia: "17 Black is fact. Where is the money coming from? Did you find out?”
Apap Bologna: “Yes we did. I can announce Electrogas had absolutely nothing to do with it.”
Yorgen Fenech's resignation
10.54am Apap Bologna says he was appointed a director of Electrogas in November 2019.
“Yorgen Fenech was not present when we were told that he was resigning. We were informed by Ray Fenech that Yorgen was resigning from all his posts”.
“Did you ask him why?”
“No. I tried calling him, but he did not answer my calls.”
“Were you aware that he was the owner of 17 Black?”
“I was aware of what was in the press. But not as a fact. We asked him about it at a board meeting, but he did not answer us.”
The answer prompts murmurs of disbelief from the board.
Judge Lofaro: "What did you do when he did not reply? Just stare back?"
10.49am Apap Bologna is asked about an internal audit the consortium carried out. He says it was “over and above” standard audits and that auditors had access to all Electrogas information.
Did that include servers and documents, he is asked.
“I’d have to check,” he replies.
10.44am Apap Bologna says Electrogas got to know that documents had been leaked from its servers in December 2017.
“They reported it to the police. And till today we do not know who responsible for the leak.”
Judge Mallia notes that Caruana Galizia was already dead by then and it was public knowledge that she had had a cache of documents leaked.
“Did you read her blog?”
“I read her blog at times. Occasionally”.
“It was in the public domain, and yet you tell us that you got to know in December 2017?”
Judge Lofaro reminds the witness he is under oath.
Apap Bologna: “I can’t remember”.
Discussing 17 Black
10.40am Apap Bologna is asked what was done when allegations about 17 Black first emerged.
“We had a board meeting and we asked about it. We obviously discussed it. I wasn’t a director [at the time],” he says.
“The EGM directors went through records of the company and concluded there was nothing”.
Apap Bologna says that GEM Holdings shareholders had met to discuss the Panama Papers and 17 Black, and the conclusion they reached was that there was nothing to justify removing Yorgen Fenech as director.
Learning about Fenech's political contacts
10.36am Comodini Cachia takes over questioning. She refers to a presentation document given to the PN about the investors behind the deal.
Apap Bologna tells the court that it was himself and Gasan at that stage. Comodini Cachia asks why he was not listed as a director, given that it was his pet project.
“Because I didn’t have the know-how or technical knowledge to put this together. Yorgen Fenech is more qualified in that.”
Comodini Cachia: “But you are a director now. How are you managing?”
Judge Said Pullicino: “How come Yorgen Fenech was made director? He didn’t have full expertise even if he had more experience than you. Perhaps it was because of his contacts?
“I did not know that he had such close relations with these people,” Apap Bologna replies. He says he first learnt of Fenech’s political ties “when it came out through the media”.
“Did it bother you?”
“I didn’t question it. Why should I suspect that there was anything wrong?”
'Yorgen did not know'
10.30am Apap Bologna is asked about Electrogas winning the power station bid.
“You say there were 18 bidders in all. They didn’t qualify.”
“That’s not for me to say,” he replies.
Apap Bologna is reminded of an NAO report into the project.
The auditor general “said expression of interest was tailormade for Electrogas,” Judge Said Pullicino says.
“I don’t agree with that. Mr Mizzi came out with this in January. I met Yorgen later. So how could I have spoken to government? Yorgen Fenech did not know…”
Lawyer Therese Comodini Cachia interjects.
“How can you say Yorgen Fenech did not know? Did you know Yorgen Fenech before January 2013?”
Did you know Joseph Muscat and John Dalli before 2013?
“[Edward] Zammit Lewis?”
“So how can you exclude that you spoke to them?” Comodini Cachia asks.
The witness is warned by Judge Said Pullicino.
“You have to be careful,” the judge says, “because what you are saying doesn’t tally with what you said before”.
Deal wrapped up in six weeks
10.25am Judge Lofaro: “So all these financial negotiations were concluded in one month?”
Apap Bologna: “Yes, we negotiated in six weeks. We also hired serious consultants such as PwC”.
Involving Gasol, Siemens
10.24am Apap Bologna says he had suggested involving energy firm Gasol in the project, as they were already partners with SOCAR in other projects.
He recalls Yorgen Fenech also meeting with another company, EDF, in Paris. Apap Bologna says that connection came through a cousin of his, who works with the firm. He says he could not make it to the Paris meeting and he is not sure whether Gasan was there.
Apap Bologna says Siemens were introduced through Gasol and that an initial meeting was held in Malta.
Azeri stakeholders were introduced by Gasol, he says, "and I had no qualms about them at the time".
'Yorgen Fenech led the project'
10.18am Answering questions, Apap Bologna says he knew Joseph Muscat as a passing acquaintance – “hi and bye”, as he puts it – and denies meeting him to discuss the project before it was awarded.
Judge Said Pullicino: “Did you leave political side of project in the hands of Yorgen Fenech? You need to open up”.
Apap Bologna: “What is for sure is that the lead person on the project was Yorgen Fenech.”
Judge Lofaro: “He had business acumen and the right connections”.
Apap Bologna: “I didn’t say he had connections”.
Roping in Fenech and Gasan
10.15am Apap Bologna speaks about his relationship with Yorgen Fenech.
He says he first spoke to him about the project, and then to Yorgen’s father George.
“This was in January,” he recalls. “I was still [driving it forward] by myself. I had spoken to the Gasans in 2007, so it was only decent to see if they were still interested in the project. So George Fenech spoke to Joe Gasan. George and Gasan had projects together. That was in 2013.”
Apap Bologna denies pre-election talks with Labour
10.09am Apap Bologna denies having any discussions about the project ahead of the 2013 election.
Judge Lofaro: “But how could [former energy minister Konrad] Mr Mizzi have all these details before the election?”
Apap Bologna: “I did not see this project being promoted before the election”.
Judge Said Pullicino: “Labour were very specific. The timing between the day of the election and the announcement of this project was so short.”
The witness is asked whether he informed someone with the Labour Party, or his friends, of the project changes.
“No, I did not. The first time I met Konrad Mizzi, the first time I came across him and spoke to him was after the project was awarded. I’m 100% sure of that.”
10.06am GEM Holdings was formed in 2013, he says, and it was intended to be a brand, because shareholders wanted Malta to be the gold standard for energy projects.
The witness is told that Paul Borg Olivier gave the inquiry a presentation which had been given to the PN government about a power station project.
Apap Bologna says the presentation differed to that proposed later, in 2013.
“We presented a plan for a 400-megawatt plant,” he says, adding that they wanted to build something which could generate money for the government.
Project reignited as Apap Bologna ropes in Fenech
9.59am The project was brought back to life when Labour included pledges to restructure energy generation in Malta in its electoral manifesto, Apap Bologna says.
“After seeing so many press releases coming out, I thought ‘we have this project
just sitting here’, so I spoke to Yorgen Fenech [about it],” he says.
Apap Bologna says he and Fenech were acquainted and that his family was renowned for undertaking big projects.
"In 2007 or 2008, I had spoken to Mr Gasan," Apap Bologna recalls. "Then in 2013 it was [Yorgen's father] George Fenech who presented the project to Gasan.”
Project was first pitched to John Dalli
9.55am Apap Bologna says he first pitched the project to Dalli, who then introduced him to Gonzi.
What did Dalli think of the project, the witness is asked.
“Well, he introduced me to the prime minister,” he replies.
Apap Bologna says he and his partners did not speak to the Labour Party at that stage.
First impressions of the project
9.51am Apap Bologna recalls Gonzi saying it was a great project and a “way forward” for Malta. He says Gatt introduced him to Pullicino, who set up a meeting with the environmental regulator.
“Pullicino did not attend the meeting at the last minute,” he adds.
But things then stalled, he says, and a decision was taken to stop the project plans.
“When things weren’t moving forward and the minister did not join the ERA meeting, we felt it would not happen.”
Gonzi presented with power station idea in 2007
9.46am Apap Bologna is asked how the power station idea came about.
He explains how he knew of the problems Malta had with high energy costs and had spoken to a friend in the engineering sector.
He says he had a meeting about the idea with a friend called Constantine Obermay in 2007, then put together a paper based on Enemalta's power generation plan.
Apap Bologna says he presented the proposal to then-prime minister Lawrence Gonzi, his ministers Austin Gatt, George Pullicino, John Dalli and PN general secretary Paul Borg Olivier in 2007 or 2008.
Apap Bologna testifies
9.43am Apap Bologna is called to the stand, and takes the oath. He asks to speak in English.
The entrepreneur tells the court that he returned to Malta from overseas around 20 years ago, having spent most of his life in the UK. His main business interests lie in pharmaceuticals, he says. The Electrogas investment was intended to diversify his portfolio.
Who's in court?
9.41am The inquiry is being led by judge Michael Mallia and his fellow judges Abigail Lofaro and Joseph Said Pullicino.
Lawyers Jason Azzopardi and Therese Comodini Cachia are representing the Caruana Galizia family during proceedings. Daphne Caruana Galizia's sisters are among the family members present.
The first of today's witnesses, Paul Apap Bologna, is also in court.
9.35am Good morning and welcome to this live blog. We're at the Valletta law courts, where the Caruana Galizia inquiry will resume within minutes.