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Oil trader is accused of stealing from his own family

Oil trader’s brothers file court protest

The businessman at the heart of the Enemalta oil procurement scandal, George Farrugia, siphoned off more than €6 million from his family’s business according to a judicial protest filed by his brothers.

He allegedly short-changed the firm over contracts with Enemalta and other traders

The case goes back to 2010 when the Farrugia brothers, owners of the John’s Group, stumbled on electronic evidence that their oil trading company Powerplan, managed by George, was losing millions of euro in agents’ commissions, which it was meant to be making on all local oil sales by international commodities giants Trafigura and Total.

Powerplan represented these companies in Malta and, according to its agent’s contract, was owed $1 for every metric ton of oil that it sold on the local market, be it to Enemalta or other local oil traders.

However, the Farrugias contend that their 47-year-old brother had been channelling the commission due to Powerplan to Aikon Ltd, which he owned.

He short-changed his family’s company over several oil contracts with Enemalta and traders such as Salvu Zammit and Sons, Falzon Service Station, Cassar Fuel Ltd, Island Bunker Oil, Fuel Energy Ltd and Bunker Supplies, according to the protest filed by his brothers. They said they uncovered the extent of the haemorrhage after commissioning an investigative report that was submitted in court, along with an IT audit.

Their evidence included e-mails from George’s wife, Katherine, in which it emerged that she would send payment instructions to the international traders through an unofficial Yahoo account.

Sources said the parties reached an out of court settlement in the region of €1.2 million.

He eventually split away from John’s Garage in 2010 but maintained his involvement in oil procurement through Aikon.

In recent weeks, Malta Today has published e-mail correspondence between Mr Farrugia and the same traders that purportedly shows his attempts to infiltrate the Enemalta management to secure favourable treatment on oil contracts from the energy corporation.

He is now negotiating with the police and the Attorney General’s Office a request to be granted a Presidential pardon in return for evidence on the ring of businessmen suspected of involvement.

Investigators are open to the possibility of a pardon being granted but are confident of being able to secure convictions with the evidence they have uncovered so far.

The probe is two-pronged: one aspect concerns allegations of kickbacks taken by petrochemist Frank Sammut on oil sales to Enemalta, of which he is a former director.

The second centres on the corporation’s former oil bunkering arm, MOBC, and the private company Island Bunker Oil, which took a bulk of its business after the public corporation stopped its bunkering operations.

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