Electrogas shareholder Mark Gasan denied being present for a dinner which took place at Portomaso and for which Yorgen Fenech and then Opposition Leader Joseph Muscat were present for among others.
Gasan testified during the public inquiry tasked with looking into the assassination of investigative journalist Daphne Caruana Galizia.
During the inquiry he was questioned specifically by Jason Azzopardi on a dinner which took place three Fridays before the 2013 general election.
Gasan denied being present as Dr Azzopardi warned that there were eye witnesses.
During Gasan’s testimony, it also transpired that he had invited Muscat for his wedding.
On Friday at 9.30 am, Minister Carmelo Abela will be called testify.
On Wednesday at 2pm, Minister Jose Herrera and Paul Apap Bologna will be called to testify.
Thank you for following this live blog.
The questioning ends. Gasan steps off the stand.
Following a last question from the board, Mark Gasan says he does not know anything about a meeting in Azerbaijan.
Gasan denies, but Dr Azzopardi says there are eye witnesses.
Dr Azzopardi asks about a dinner on 15 February 2013 which took place at George Fenech's Portomaso residence for which Yorgen Fenech, George Fenech, Karmenu Vella and his son John, Mark Gasan and his father, as well as Joseph Muscat were present for.
The initial estimated cost was €250 million. It shot up to €350 million by the request for proposal stage.
Dr Azzopardi: During October 2013, were you aware that the EU announced that the gas pipeline between Malta and Sicily has qualified for funding. The question is were you aware of any discussions between members of Electrogas and government on this?
Gasan says that return on its investment does not necessary mean physical profit.
"“We hope to have the project particulars finalized by March 2014,” said Buxton. After the start of construction, it will take another 18 months to get the floating storage unit (FSU) in place. By September 2015, delivery of the first LNG shipment is expected and the consortium should start seeing returns on its investment, he said."
Dr Azzopardi reads out from: “Speaking to International Oil Daily, Gasol Chief Operating Officer Alan Buxton said the success of the project relied on the recent landslide victory of the Labor Party, which came to power in March.” – Energy Intel
The witness says that possibly Apap Bologna and himself were showed different financial models.
Gasan says that he does not recall having read it and adds that he was aware of Gasol's financial difficulties, however, Gasol was backed by SOCAR.
Dr Azzopardi asks whether he read this article.
Dr Azzopardi reads out from Caruana Galizia's Running Commentary: "30% shareholder in power station company is technically bankrupt" [Read more here: https://daphnecaruanagalizia.com/2015/07/30-shareholder-in-power-station-company-is-technically-bankrupt/ ]
Dr Azzopardi takes over questioning.
Gasan says that the allegations came out after Fenech's arrest.
Dr Comodini Cachia asks the witness whether he questioned about the Mriehel high rise project following the revelations that Yorgen Fenech met the minister the day the policy was changed.
Gasan says he only met with Konrad Mizzi and Keith Schembri after the bid.
Muscat was invited at Mark Gasan's wedding.
Gasan says that he met Joseph Muscat "casually" before he became Prime Minister. He then paid a courtesy visit later.
In her email, Halpin informs them that Electrogas was drawing up a list of companies to include on their tenders.
She asks whether there was an arrangement that the Maltese companies would provide services.
Dr Comodini Cachia refers to an email by Halpin dated 16 June 2017 and which was sent to Fenech, Mark Gasan, Ray Sladden among others.
Asked whether the Gasan Group provided services to Electrogas, the witness says that they leased some cars from Gasan Groups.
Gasan says that he was involved in the insurance business. He says that his family was not providing that insurance.
ERA needed a €5.5 million guarantee which was later halved and an insurance policy.
Gasan says that this email concerned an insurance policy.
Dr Comodini Cachia asks about an email Mark Gasan sent on 28 December 2016 to Catherine Halpin and others regarding the IPPC guarantee, in which he asked Halpin how the meeting went and whether they had agreed in principle.
Dr Comodini Cachia reads out from 12 January 2017 email by Stephen Jorgensen to a list of people. She points out that the witness was involved later in the email exchanged. It concerned Electogas obligations with regards to the IPPC permit which was reduced from €5.5 million to €2.5 million.
Gasan says that he was not aware.
There was another issue with ERA in relation to the permit you had obtained to bring in the FSU.
He asks whether this was published in the media and says that he was not.
Gasan is asked whether he was aware that the AG's advice was sought to bypass Parliament on the issue of excise tax.
Gasan says that he did not know the minister.
He says that he did not meet the minister and the email followed the call he had with the CFO.
Gasan says that he is going to explain.
"I was speaking to Peter earlier on that there are number of issues. Peter can you list the pending issues? Tactically we need to be aware of all the issues and devise a plan how to handle all and not handle each one as they come.
Do we skip Enemalta and go straight to the Minister?" she reads out.
Dr Comodini Cachia reads out an email from Electrogas leak dated 5 January 2017 to Catherine Halpin and the CFO (Peter).
From what the CFO had told him, that excise tax was payable by Enemalta.
"If that is incorrect, Electrogas should come out and clarify."
Gasan says that from the board meetings he attended this was not discussed.
"Electrogas needs to come out with a position on the issue," Gasan reiterates.
"Since this issue has come out. I've been pushing Electrogas to address it. They need to come out and explain their position. Actually it is very frustrating," Gasan says.
"In an email of July 2017 in which you are not copied in. One of the issues brought up is excise tax," Dr Comodini Cachia continues. She is reading from an email by Electrogas CFO.
"The email conversation followed a conversation which I had with the CFO of Electrogas. He had told me that the excise tax should be paid by Enemalta and they were saying the opposite. I sent an email to resolve the issue. There was nothing untoward," he says.
Dr Comodini Cachia says that the email clearly show he was negotiating the tax bill.
"I'm seeing the replies, but this is something PwC did," Gasan says.
Dr Comodini Cachia informs the witness that the emails in his hands is an exchange between Gasan and another person.
He says that it was about a tripartite agreement about "some double tax agreements".
She shows the email to Gasan.
In one of these emails you highlight that you had in issue with tax, Dr Comodini Cachia continues as she refers to an email from 14 December 2016.
"These are normal things," he reiterates.
Gasan remarks that it was normal for running late when honouring payments, after Dr Comodini Cachia read out an email which was directly addressed to him.
I was shocked, Gasan says.
Gasan was informed of a breach in the system on 27 December 2017. The email was sent Catherine Halpin.
After reading the email, Gasan says that this was a negotiation and was not showing a default.
The lawyer has emails from November 2016 until February 2017 in which Gasan himself was copied.
Dr Comodini Cachia asks whether there other financial difficulties.
"The way it was explained to us, is that Yorgen Fenech was going to be full time on this project," Gasan recalls.
The witness is asked about the company which is owned solely by Fenech and what led the shareholders agree to a parallel shareholding by Fenech.
Gasan confirms that he was reluctant to become an Electrogas director due to the allegations.
Gasan says that three new directors joined GEM Holdings – Gasan's father, Apap Bologna's father and Ray Fenech. This would allow them to have quorum.
Dr Comodini Cachia presses the witness on why they took six months.
GEM Holdings took six months to find a replacement for Fenech.
The witness says that while GEM Holdings had accepted Fenech's resignation they had to find a replacement.
Gasan says that since he was in copy he replied that he did not want to replace Yorgen Fenech.
Gasan says that Yorgen Fenech's one liner email was possibly the result of the meeting between Apap Bologna, Gasan Group and Ray Fenech.
Judge Lofaro: Did he admit any wrongdoing?
Recalling from memory, Gasan says that in his email Fenech informed the board that he was "moving on".
Gasan says that immediately after this meeting, Fenech sent an email to the board of directors of Electrogas.
In May 2019 after the discussion between Gasan and Ray Fenech, the latter had to speak to Yorgen Fenech.
The board says if he was a recipient, then yes.
Gasan asks the board if he should the one presenting this email by Fenech.
Fenech issued an email to all Electrogas shareholders denying the claims in the media.
In November 2018 – the news breaks out that 17 Black belongs to Yorgen Fenech.
Dr Comodini Cachia presses the witness further.
Gasan was "in constant contact with his uncle" after Yorgen Fenech was constantly away.
Once again, Gasan reiterates that Paul Apap Bologna was present at Electrogas board meetings.
"We felt that someone from GEM needed to be at Electrogas board meetings," he says.
Gasan: Later on after 17 Black [November 2018], Paul and I were alternating on Electrogas board meetings
Dr Comodini Cachia: Was this occasionally or frequently?
Gasan insists that both he and Apap Bologna would attended board meetings when they were not directors. They would serve as alternates when Fenech was not present.
Either Paul or I, would replaced GEM Holdings director at Electrogas board meetings, Gasan explains to the board.
He told us he didn't, Dr Comodini Cachia says.
Gasan confirms that Paul Apap Bologna attended Electrogas board meeting in his presence.
Gasan says that he started involving himself more, explaining they got involved more in the costs. He confirms that he was attending board meetings of Electrogas as an observer.
Until 2015 they intended to remain as passive investors. When it become clear that there were issues, Gasan Group decided to get involved more in the project to understand better.
Gasan is asked again about their "passive" role.
The main problem with the project was the cost overrun, Gasan says, adding that the main problem was financing this aspect of the project.
Dr Comodini Cachia asks whether they entered into a security supply agreement and purchase agreement in case of a gas pipeline to safeguard themselves.
Referred to Apap Bologna's statement that Electrogas would expect a profit at 2023, Gasan says that they were expecting a profit at the end of the decade.
"The last financial model I've seen showed that the first profit would be made …" Gasan says mumbling something.
The estimates on the deal were wrong, Gasan says, particularly when it came to costs.
Gasan explains that there were substantial cost overrun when compared to the estimates.
Gasan says that Electrogas submitted the bid and was awarded the deal.
Gasan: Initially yes.
Chief Justice: Am I correct in understanding that as a company you considered to be a safe long-term investment?
The expected return at the expression of interest stage was looking pretty good, Gasan says in a reply to a question by Dr Comodini Cachia on the expected return.
PwC started presenting figures during the expression of interest period.
"From what I was told, Gasol was financially supported by SOCAR," he says, adding that he was not aware of Gasol's financial difficulties.
In the 11th hour we were advised that Gasol will not remain in the project, Gasan says.
Gasan says that he believes that Gasol left the consortium in mid-2015.
Gasol features on the power point. He says that he believes that Paul Apap Bologna had a contact at Gasol.
She asks about the similarities between the power station and the power point presentation.
Gasan explains that he saw the power point presentation after Borg Olivier's testimony when he heard about it and asked for it.
Dr Comodini Cachia starts questioning the witness.
Gasan confirms that he was invited at the party at Portomaso celebrating the financial closure and the extension of the bank guarantee.
Gasan says the group are committed to not making a profit from the deal.
Gasan says that they felt they had to come out and state it publicly when the links between the power station project and the assassination.
"Probably since 17 Black," he says.
Gasan says that Gasan Group has been trying to seek an exit from Electrogas for a while.
"From inception we made it clear that we were a passive investor," Gasan says, explaining that this was why he did not take up the post as a director.
Gasan says that Ray Fenech informed them that Yorgen Fenech had resigned all of his positions.
In November 2019 a GEM boarding meeting was held for which Ray Fenech was present but not Yorgen Fenech.
Gasan refused and Apap Bologna was appointed instead.
In May 2019, Yorgen Fenech saw the minutes of the meeting between Ray Fenech and Gasan; and sent an email to Electrogas informing them that he was resigning and appointing Gasan in his stead.
Gasan says that Fenech wanted to resign in May 2019.
Siemens Group tried to have Fenech removed from Electrogas, the board says.
Gasan insists that at that point, it was just allegations adding there was no legal action which could have been taken.
"I can't see what action I could have taken," he says.
Gasan replies: to do what?
Judge Lofaro presses Gasan on what possible course of action they considered against Fenech and whether they considered involving their lawyers.
In May, they had a meeting with Ray Fenech since Yorgen Fenech was appointed director at GEM Holding by Tumas Group.
Judge Lofaro asks what action could they have taken because almost twelve months had passed.
The witness says at the time he was not aware of the link between 17 Black and Daphne Caruana Galizia's assassination.
He says that Ray Fenech was also very concerned.
Gasan explains that they got Ray Fenech (Yorgen's uncle) involved.
"We were trying to hold meetings to discuss the issue," Gasan says, explaining it was impossible to hold a meeting if one of three directors were missing.
The board meetings required all three directors present.
In January 2019, Yorgen Fenech was hardly around because he was traveling a lot, Gasan recalls, saying they tried to call a board meeting of GEM Holdings.
He says that Gasan Group was very concerned.
There is stark evidence that 17 Black was his, he confirms.
Gasan: That is a very hard question. Publicly the company seems his. He has not denied it.
Judge Mallia: When did you find out that Yorgen was lying?
He says that he can't say because he was just repeating what he had been told.
Chief Justice Emeritus asks why did Fenech sought legal advice in London.
Fenech had told them that he was looking at lawyers in London to sue journalists. This did not happen.
Fenech had gone through each allegation and denied it with the board.
He says after review that there were no transactions between 17 Black and GEM Holdings or Electrogas.
Two weeks later, Gasan called Fenech again, who insisted that he did not own 17 Black.
"I was in shock," he says.
Two weeks later the story came out.
The witness says that he did not ask Fenech whether 17 Black was his or not. He expected Fenech to rebut the claim.
Gasan says that he received questions about 17 Black from a journalist. After replying to the journalist, he called Yorgen Fenech and told him: "Sort it out. I'm assuming it's not true."
He replies: "no".
Judge Lofaro presses the witness on the involvement of Nexia BT in Panama Papers and whether the consortium discussed this at a board meeting.
"Panama Papers were shocking. But there were no links with Electrogas," he says.
He says that they sought quotations and Nexia BT was substantially cheaper.
Nexia BT was the auditor of GEM holding.
Gasan says that he met Brian Tonna from Nexia BT socially and there was no business with him.
"I cannot see how it favoured Electrogas, we were charged for it," he says.
He says Electrogas paid the government 11 million euro for the guarantee, adding that it is incorrect to assume that the government guarantee benefited Electrogas.
"In my opinion, the NAO levelled criticism at the government, which in my opinion sometimes was fair. The issue was one of a state aid. The government guarantee should have never happened. It should have been cleared before. The government guarantee somehow benefitted Electrogas."
Asked whether he was concerned about the NAO report, Gasan says:
Gasan says that Gasan Group does not have commercial ties with Kasco group.
He does not know whether his father met Mizzi or Schembri.
He says that he had no lunches or dinners with Muscat.
Gasan says that he met Konrad Mizzi at the official opening of the power station in 2017.
Gasan says that he met Keith Schembri much later after the election.
Gasan insists that he only became aware of Fenech's close connection with the Labour Party after the general election.
"He was friendly with Konrad Mizzi and Keith Schembri," Gasan says about Yorgen Fenech in 2014.
"My understanding that not all Electrogas agreements were closed off after the 2013 Election and the contract closed off," Gasan says.
Lenders were pushing for an extension, he says.
"I believe there were two agreements pending," he says.
The government guarantee was expiring in August 2017, Gasan recalls. He says that there were a couple of options – extend the government guarantee until the final agreements were concluded.
"In 2017, the construction of the power plant was reaching its end," he explains.
Judge Mallia asks the witness for what was his reaction when the consortium was informed that Electrogas was defaulting by BOV.
"At the point in time there was the Electrogas company and three directors handled it," he says.
He says that he was not involved in the discussion.
Gasan says that the bank guarantee came much later and had to do with state aid.
Chief Justice Said Pullicino asks about the bank guarantee.
Gasan Group was a passive investor, he reiterates.
Gasan says that for them this was investment, while the manufacturer would be a shareholder. He is replying to a question by Judge Lofaro on the lack of experience.
Sometime before the election, Gasan, Fenech, and Apap Bologna.
"Basically Yorgen was extremely interested in this project. George Fenech was excited about it," he says.
Eleven of the eighteen bidders were selected for the second stage, Gasan says.
Gasan says that he does not know why it took them so long.
"There was a potential that the consortium would not put in an expression of interest. Had Siemens not confirmed," he says.
Siemens only committed to the consortium at the eleventh hour, he says.
Gasol had their joint venture with SOCAR and and a 50% stake holder.
The expression of interest was not a long document, he says.
The expression of interest was launched towards the beginning of April 2013 and was closed six weeks later, he recalls.
At that point, the 18-year long agreement looked interesting, he says.
Madame Justice Lofaro asks about the feasibility study.
Chief Justice Emeritus Said Pullicino presses him. However, Gasan insists that the group only pushed through with their involvement in March 2013.
"We wanted to invest," he insists.
Gasan Group was looking at a long-term investment, he says.
He explains that at the time their equity share was thought of €5 million.
Gasan thought of the project as a passive investment.
"I believe Fenech had already signed a letter of engagement with PwC to assess the feasibility of the project," Gasan says.
They discussed bringing PwC on board.
The witness says that they discussed the logistics with Fenech.
Gasan explains that after the internal discussion, they sought further clarification from George Fenech.
Gasan is shown the presentation by Apap Bologna, with the witness replying that he only saw it recently and was possibly shown to his father at the time.
"My father and I had a discussion about that. We had a property development with Tumas Group in Marsascala. The project was very successful. It involved Ray Fenech, George Fenech, my father and I," Gasan says.
"I'm not aware of that," he replies.
Chief Justice Emeritus Said Pullicino asks whether he was aware that Fenech and Apap Bologna had gone to PL and what was their reaction.
Gasan says that he was not aware of any discussions with the PL at the time when it was still in Opposition, he replies to a question by Chief Justice Emeritus.
"This was subject to PL coming into power," he says.
They approached us to see if we were interested, Gasan recalls.
This was around February 2013.
Asked about when the PN were approached, Gasan says that Apap Bologna had approached his father and it was just an idea.
George Fenech had pitched the idea to us, he explains, adding that Partit Laburista had this idea for energy generation of a gas-fired power station.
Gasan explains that in 2013 they were approached by late George Fenech (Yorgen's father). They had met on something else.
Paul Apap Bologna is Gasan's cousin-in-law.
He says that he did not have any experience in the generation of electricity and Electrogas is his first experience.
He studied in the U.K. and returned in 2003. He started off in property and branched into other ventures.
Judge Mallia asks the witness to give a brief background on his professional career.
Gasan requests to testify in English.
Mark Gasan takes the witness stand.
Good afternoon and welcome to Newsbook.com.mt live blog. We're live from courtroom
Fellow shareholder Paul Apap Bologna who took the witness stand on Friday, will be summoned at a later stage to submit more evidence.
Gasan Enterprises has 11.72% shareholding in the power station project which has been plagued by allegations of corruption and linked to the assassination of the journalist. GEM holdings which is made up of the Gasan family along with the Fenech family of Tumas Group and Apap Bologna family own 33% shareholding in the project.
Siemens and Azerbaijan’s state energy SOCAR each own 33% shareholding.
Last year, Yorgen Fenech was arrested and charged with being an accomplice in the murder of Caruana Galizia.
The Board of Inquiry is composed Judge Emeritus Michael Mallia, who is chairing the inquiry board, and two other board members, Chief Justice Emeritus Joseph Said Pullicino and Judge Abigail Lofaro.
Lawyers Jason Azzopardi, Therese Comodini Cachia and Andrew Borg Cardona are appearing for the family.