The company at the heart of the oil purchase scandal, Trafigura, was awarded its first procurement tender in 2004 even though it was not among the 16 bidders, a court heard yesterday.

This emerged when Assistant Police Commissioner Michael Cassar was testifying in the case against Frank Sammut, the one-time adviser of former Enemalta chairman Tancred Tabone. Both men, in separate proceedings, stand charged with fraud, corruption and money laundering.

Mr Cassar said that despite there being no documentation that Mr Sammut formed part of the oil procurement committee, minutes of its meetings proved otherwise.

The minutes also indicated that Trafigura was first awarded a contract on December 18, 2004, and it was interesting to note that the company was not one of the 16 bidders for that tender.

Mr Sammut was paid 75 US cents per metric tonne of oil on that tender, the money being paid into a specially-created Swiss bank account.

In 2003, Enemalta used to buy oil from the National Oil Company until Malta joined the European Union and the quality of the oil had to be upgraded. Tenders therefore had to be issued.

Enemalta’s board of directors had approved Mr Sammut as a consultant to Mr Tabone at a fee of €18,640 a year.

Mr Cassar explained that according to the job description, Mr Sammut was “to act as a consultant to the chairman, to reorganise and rationalise the storage of petroleum products in Malta and to give advice and make recommendations as necessary on the management and running of the petroleum division”.

In a board meeting held on May 5, 2004, Mr Tabone gave details of how the committee was constituted.

According to item 3.3 of the minutes, Mr Tabone said that “the adjudication of offers and negotiations are being conducted by himself as chairman, the corpor-ation’s chief executive officer, the chief financial officer and the petroleum consultant in a very strict and confidential manner”.

The minutes of a meeting of the oil procurement committee held on December 18, 2003, when Trafigura was awarded its first tender to supply low sulphur fuel oil, showed that the committee was composed of four members being the chairman, the petroleum manager, the finance manager and Mr Sammut, as the consultant.

Trafigura had been awarded another contract on April 29, 2004, which was extended to August 23 of that same year, and again on September 15, 2004 and on February 7, 2005.

Although Enemalta could not produce any more minutes of the committee meetings, other documents were found such as offers from Trafigura regarding the purchasing of oil. These were marked as being for the personal attention of Mr Sammut.

Mr Cassar said that an internal memo on a meeting held on September 11, 2004, recorded that Mr Tabone had received instructions from Minister Austin Gatt to terminate Mr Sammut’s contract as consultant at the end of July 2004.

In this meeting, Mr Tabone informed the board that “that was a very hard blow for him and that he had explained to the minister the consequences that might arise from such a decision”.

Mr Tabone was also recorded as having said that “Mr Sammut’s expertise in oil procurement could not be matched by anyone within the corporation, he was well aware of all movements in what was being offered within the international market, particularly when it concerned the right specifications of the quality of fuel oil for local use”.

The document quoted Mr Tabone as saying he felt “very uneasy and very worried on how he could manage future procurements without such consultancy services as he declared himself incompetent to undertake purchases on different kinds of fuel oil amounting to about €280 million, especially on technical matters”.

Mr Sammut was questioned by the police on his role in another company – Island Oils Bunkering Ltd – of which he was a former shareholder at a time when he was the CEO of MOBC, a subsidiary of Enemalta that was a direct competitor of IOBL.

Mr Tabone was chairman of MOBC and also had shares in IOBL, but both of them were silent partnerships.

Two other companies had been set up to hide the fact that they were shareholders, Mr Cassar noted.

He said that Mr Sammut stopped being a shareholder after he was accused of stealing money from the company by Francis Portelli, of Virtù Ferries, who later tried to blackmail him saying he was aware of the kickbacks he was receiving. (Mr Portelli has also been arraigned in connection with the oil scandal.)

Mr Sammut was given $500,000 as a payoff for his share and left the business.

In his statement to the police, Mr Sammut said that at MOBC he also received commissions from another company, Totsa, a subsidiary of oil giant TOTAL, which he split with Mr Tabone.

He told the police that for fuel consignments he was paid a commission of $1 per metric tonne, which was given to him by George Farrugia, a State witness who was given a presidential pardon to reveal more information about the scandal.

Mr Sammut said in his statement that the first payment he had received was in the form of a car worth €28,000, a Korando Ssang-Yong, which he gave to his son, Mr Cassar testified.

The case continues.

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