Gasan Group chairman Joe Gasan and director Mark Gasan testified in the Daphne Caruana Galizia public inquiry on Friday.
Gasan forms one-third of GEM Holdings, which owns 33 per cent of the Electrogas gas-fired power station in Delimara, alongside Paul Apap Bologna and the Fenech family.
Caruana Galizia was assassinated in October 2017. At the time of her death, she was going through a leaked cache of Electrogas documents.
The inquiry is meant to establish whether the government could have done anything to avoid the assassination.
Highlights from Friday's hearing:
Joe Gasan said:
- Yorgen Fenech told shareholders he did not own the secret company 17 Black;
- Fenech told shareholders he was going to engage an expensive lawyer to fight his case, but this never came to fruition;
- He was not aware of Fenech's Montenegro deal;
- His group is still willing to pull out of ElectroGas deal;
- He denied a meeting at Level 22, Portomaso pre-2013;
- Gasan did not discuss the project with Labour before 2013
Mark Gasan said:
- He was not aware that Keith Schembri was participating in meetings and negotiations concerning ElectroGas;
- He was not aware that the government was instructing ElectroGas on how to tackle media questions about the matter in April 2018;
- He personally never met with minister Konrad Mizzi before the project inauguration.
Minute-by-minute:
Case adjourned
12.55pm Friday's inquiry comes to an end. That was a three-and-half hour session with businessman Joe Gasan and his son Mark.
The next public sitting will be on Wednesday. We'll be back with Friday's highlights shortly.
Meanwhile, Prime Minister Robert Abela has weighed into the issue of public inquiries, telling journalists on Friday that he is against public inquiries being used "to circumvent the law courts".
No awareness about Montenegro deal
12.45pm Comodini Cachia says a critical National Audit Office report was not of concern to him because he had the government's backing in bringing project to fruition.
Gasan says he was not aware of involvement of Konrad Mizzi and Keith Schembri in the project.
Comodini Cachia: "Were you aware of Yorgen Fenech's business with Musayev in Montenegro?"
Gasan: "No."
Comodini Cachia: "Did you ask why Musayev was resigning at the same time?"
Gasan: "I was not aware that Yorgen wanted to use the same model in a project in Bangladesh."
Gasan willing to pull out
12.35pm Joe Gasan said his organisation had made a public statement about its willingness to pull out of the project.
"We believe we did good things and now suddenly we’re being attacked because of the horrible murder of Daphne Caruana Galizia. And in the compilation of evidence Inspector (Kurt) Zahra said that the main reason for the murder was ElectroGas. We stated publicly that we will never profit on this deed."
Fenech wanted to engage 'very expensive lawyer'
12.25pm Gasan says Yorgen Fenech's uncle, Ray, was very upset.
"Yorgen assured us that it’s not true. He wrote an email to all ElectroGas parties. Yorgen's e-mail was a very strong one. He also denied it when we met at GEM, to such extent that he went to England to speak to his apparently very expensive lawyer about it."
Paul Apap Bologna had told the inquiry board that Fenech had not replied when asked about 17 Black at the meeting.
"With me he denied it. Absolutely! And said he was going to London to seek legal advice. Then afterwards he did not attend board meetings, he was unwell, was abroad. We had a problem.
Gasan says he insisted that Fenech make a public statement about 17 Black.
"But then contact with him sort of died."
Joe Gasan is asked what he did to protect his reputation and investment.
"We did not have a quorum at the board. So we agreed to appoint one other director from all three: Ray Fenech, myself and Paul Apap Bologna’s father. Then we could have a quorum. Yorgen did not attend."
Fenech denied 17 Black was his
12.15pm Joe Gasan gives a timeline of the project, underlining the mammoth task of carrying out the project within deadline.
The board asks if they had spoken to Yorgen Fenech before 2013.
"No. We only spoke to Paul Apap Bologna in 2008."
Asked about Keith Schembri, Gasan says he believed the then chief of staff had attended certain meetings with the prime minister.
Was Joseph Muscat invited to his son’s wedding?
Gasan answered that both the then Prime Minister Lawrence Gonzi and Joseph Muscat were on the invite list and both attended the wedding. (He initially says Mizzi but corrects it to Muscat.)
The Gasans and the Fenechs had purchased land at Ta' Monita and land at Mrieħel.
Joe Gasan says he knows Yorgen Fenech as a young boy.
"People at school would say he was a top student and he clearly wanted to do more and his father gave him that opportunity. At the time I had no reason to doubt that decision."
The board asks when did he start to doubt him.
"When things came out about (secret company) 17 Black. We also spoke to Yorgen. He denied 17 Black was his."
Yorgen Fenech.Connections with Muscat
12pm An expression of interest was put together for a project the new government wanted to put together in a short period of time. Siemens came into the project at the last minute.
The board asks if he had discussed the project with the Labour Party before the 2013 election.
"No," Joe Gasan replies.
He says he met Joseph Muscat socially but rejects suggestions from the board that he had met him over lunches or dinners.
Gasan is asked if he had seen Karmenu Vella or Keith Schembri at Level 22, Portomaso. But again he says he did not.
Any meeting with Joseph Muscat were held at OPM and never alone, the businessman insists.
"There were meetings at Castille about the MIDI project, more than one, but absolutely never about ElectroGas."
Yorgen Fenech willing to devote himself 'full-time' to project
11.55am Joe Gasan is one of Malta's best-known businessmen. He says in 2008, together with Paul Apap Bologna, he went to Enemalta for a meeting in connection with a particular project, but nothing came out of it.
In February 2013, George Fenech had told him about the project the Labour Party was developing in connection with the power station.
"When Labour came out with the LNG project, George and Yorgen (Fenech) and Paul (Apap Bologna) spoke to us. Yorgen Fenech, whom I knew as an intelligent guy, was willing to devote himself full-time to the project. It was John Zarb of PWC who helped us on the bid, RFP and financing."
Joe Gasan pictured in 2016. Photo: Mark Zammit CordinaThe 2016 'hole'
11.45am One last question: In March 2016, Halpin had written an email about emergency funding. The email, copied into Mark Gasan, referred to the interest that was due on shareholders' loans.
“I know it’s low but this is to dig the company out of a hole...” What hole was the company in?" Comodini Cachia asks.
"Was this a time when ElectroGas was facing financial difficulties because of the bridge loan?"
Gasan: "I don’t recall what hole'.
Judge Lofaro: "You don’t you recall what hole, even though you were copied in that email?"
In March 2017, there was another injection by shareholders, he says.
Mark Gasan's gruelling session is over. His father, Joe Gasan, returns to the court room.
Keith Schembri's involvement
11.30am The judges return and Mark Gasan is called back in after leaving the court building.
They want to check a particular email.
Comodini Cachia asks about a particular email dated October 2017 sent by the COO of ElectroGas to Fredrick Azzopardi, Keith Schembri and David Galea and copied in to Catherine Halpin.
Sent in the evening, and following a meeting with Yorgen Fenech, the lenders made it clear that project is not bankable.
Mark Gasan says he was not aware that Keith Schembri was participating in meetings and negotiations concerning ElectroGas.
"This is the first time I am hearing about this," he says.
An hour and a half before that email, Yorgen Fenech had sent another email to the COO telling him what to write and who to address it to.
Mark Gasan is shown that email but again he says he does not recall this email.
No contact before election
11.15am Judge Joseph Said Pullicino asks if prior to 2013 there was any contact between Gasan and the government on this project.
"We were approached slightly before the election by Apap Bologna to see if we were interested. But there was no contact with the government," he says, sticking to his preceding testimony.
And on that note, Mark Gasan exits the court room.
His father, Joe Gasan, chairman of the Gasan Group is up next.
No recollection of meeting Muscat
11.08am Mark Gasan says he was not sent this particular email.
"But were you aware that people like Konrad Mizzi, Ronald Mizzi, Lindsey Gambin and so on were telling ElectroGas how to reply to media questions?" the lawyer asks.
Gasan: "What I know is what I saw on the media. I wasn’t aware of that going on."
Comodini Cachia: "Did you know that ElectroGas shared CVs with Mizzi and OPM. And chose gadgets based on what OPM liked. And chose security supplier because government chose it."
Can you exclude it? You cannot remember? I know my English and you know yours. You say 'I don’t recall' but that means that you don’t exclude it
"Did you meet Joseph Muscat at Portomaso?"
Gasan: "I don’t recall."
Lofaro presses on: "Can you exclude it? You cannot remember? I know my English and you know yours. You say 'I don’t recall' but that means that you don’t exclude it."
Government instructions on media questions
11am The lawyer reads out other emails.
“Fredrick has to be instructed by the minister first...” it says. He was not copied in this one.
Gasan says he was not aware that the government was instructing ElectroGas on how to tackle media questions about the matter in April 2018.
An email by the Guardian flagged as “urgent” was sent to everyone, including Mark Gasan.
"They were to wait for instructions from the government," Comodini Cachia says.
"So was there collusion between OPM and Mizzi’s ministry instructing you how to reply?"
Mark Gasan says he doesn’t remember.
Judge Lofaro hits back.
“You don’t recall that? You’re still young Mr Gasan!"
'Do we go straight to the minister?'
Comodini Cachia reads from an email: “Do we skip Enemalta or go straight to the minister... discuss with the minister or Frederick... at a meeting on Monday?”
That e-mail was apparently sent by Mark Gasan.
“So you weren’t aware?” I can read on. It cannot get any better," Comodini Cachia remarks.
The judges point out that from that last email it seems that not only was Mark Gasan aware but suggested that the issue could be resolved by going directly to the minister.
Konrad Mizzi (right) speaking to Fredrick Azzopardi during the inauguration of the LNG project.Mizzi's involvement
10.50am Mark Gasan is asked if he was aware of how ElectroGas dealt with government agencies, including with people like (former minister) Konrad Mizzi.
The project was a complicated one, he starts off.
"I personally never met with the minister on this project, the first time was at the inauguration."
No emails or phone calls?
"Me? No," he replies.
Asked if he was aware of meetings taking place with Mizzi, Gasan says he wasn’t present himself.
Was he aware of what Enemalta wanted and what Mizzi was ready to concede?
"I was only aware of certain disputes. There were directors of ElectroGas and they handled the issues. I didn’t say I was aware. I was only aware of certain disputes," he says.
Paying the excise duty
10.40am Comodini Cachia asks about shareholders’ loans.
"It’s for the equity," Gasan says.
Comodini Cachia: "How would you pay €12 million for ElectroGas without getting a return on them? Was it simply an accounting exercise?
Gasan: "GEM paid the money to government on behalf of ElectroGas. You’re the one using the term accounting exercise."
He goes on to explain the shareholders' loans, saying that in the end it was all put together and closed when the government guarantee was removed.
The lawyer asks if they would have ended up with a negative return if they would have had to pay the excise duty.
“Yes,” he finally agrees. “Yes. obviously."
Mark Gasan entering court.
The issue of 'over-compensation'
10.30am Comodini Cachia reads from an email sent to the ElectroGas board in 2016, citing €20.2 million in development costs. There was a $16 million fee for the sponsors.
The email read: “What shall we say about this to Oxera as this might be seen as over compensation?"
Comodini Cachia asks: "Were you aware?"
Gasan: "No. There was the issue of state aid. I don’t know."
Comodini Cachia: "The issue of over-compensation was necessary for the European Commission. That issue was not explained to Oxera nor to Ronald Mizzi in a subsequent email."
Lofaro: "Is it normal that shareholders are not aware of such problems?"
Gasan: "That money did not go to the shareholders but to cover costs on the project."
Comodini Cachia: "Are you aware that GEM invoiced ElectroGas for those amounts?"
Gasan: "Yes. GEM had paid charges actually due by ElectroGas."
A complex agreement
10.20am Therese Comodini Cachia steps in with questions to try to clarify what is clearly a very complex agreement.
Gasan says Gasol was going through financial difficulties in 2015 and dropped out later. Gasol were going to charge €2 million to ElectroGas, retain €500,000 and pay GEM €1.5 million.
NES received €1 million from GEM and €1.5 from Gasol.
Originally the success fee was to be €6.5 million, subsequently increased to €12 million. The judges ask him to explain this increase.
He says John Zarb could give a better explanation but the board want to hear him on this.
A year and a half later when ElectroGas could not secure the finances because of the state aid issue, the government guarantee came along with the bank guarantee fee plus bank charges.
Was government aware of success fees?
10.10am Each shareholder had to pay a fee of €3.6 million to the government to get the guarantee.
Judge Lofaro asks why did Yorgen Fenech get more.
"He was not paid a separate amount on success fees but on development," he replies.
Lofaro: "Was the government aware that you were being paid success fees?"
Gasan: "It was 80% government and 20% shareholders."
Lofaro: "But that was not the question."
Judge Mallia intervenes: "Did the government know?"
Gasan: "No."
Lofaro: "Did Oxera know? And the European Commission? They were put as costs. So Oxera and the government were not told that you were paid success fees? Yes or no?"
Gasan: "I was not involved."
Two agreements signed
10am Mark Gasan says there were two agreements signed before submission of the bid. There was one agreement on €6.5 million to the shareholders. The other agreement was for €2 million to Gasol and to GEM in connection with other tasks carried out by them.
Judge Abigail Lofaro points out that his version is differing to what the board was told during another sitting.
Gasan says his understanding is that the funds were to be reinvested, adding that the banks were aware of this.
The understanding was that if ElectroGas won the bid this would all be part of financial package. Then after the bid, the issue of state aid came about.
Success fees were monies to be reinvested, he says. It was first €6.5 million then increased to €12 million a year later.
"Lenders would not lend until the state aid issue was settled. My understanding is that those fees would be reinvested to cover expenses."
"But are you sure?" Lofaro asks.
"It’s my understanding, a fact," he replies.
The deal with GEM
9.45am Mark Gasan takes the witness stand. Parte civile lawyer Therese Comodini Cachia asks about the agreement the Maltese partners had with Yorgen Fenech’s New Energy Supply Ltd and the fees paid out.
Mark Gasan says the agreement was with GEM Ltd, the company formed by Maltese partners – the Gasans, Tumas Fenech and Paul Apap Bologna.
There was a time, especially from April 2017 when Fenech was not regularly present at ElectroGas.
Comodini Cachia says that in June 2014 he signed an agreement with Fenech's New Energy Supply and GEM to pay €2.5 million. It followed the agreement signed in 2013.
GEM was to get 2 million from ElectroGas but not all funds were received.