Farrugias arrested over oil scandal
Island Bunker Oils is under scrutiny
The police have interrogated several members of the Farrugia oil trading family following new evidence that has emerged about alleged corruption in the purchase of oil by Enemalta.
Several of the brothers who form part of John’s Group were arrested over the past few days and questioned on evidence uncovered by investigators and statements given by George Farrugia in relation to Powerplan Ltd, the family’s oil trading business he once managed.
Mr Farrugia, one of the brothers, has been granted a presidential pardon to reveal all he knows about the oil procurement scandal.
He was sacked from Powerplan in 2010 after his brothers accused him of siphoning off the family’s oil business into his own company, Aikon Ltd.
However, the brothers were essentially business partners during the crucial years (2004-2010) during which kickbacks were allegedly paid on Enemalta oil contracts.
They had commissioned IT consultants to scour Mr Farrugia’s office computer and that of his wife Cathy and uncovered hundreds of e-mails and invoices showing that a substantial part of Powerplan’s business was being diverted into Aikon.
Armed with this evidence they sued him for some €6.4 million in damages but eventually reached an out-of-court settlement.
However, after this settlement, in August 2011, it is understood that someone close to the family, with access to the documentation uncovered, approached a member of the Security Service and delivered a dossier on Mr Farrugia and Aikon Ltd.
Part of that dossier, with documents indicating tax fraud, ended up at the Finance Ministry, which passed them on to the Tax Compliance Unit, whose probe is still underway.
Meanwhile, investigators are also turning their attention to Island Bunker Oils, the company owned by the former Enemalta chairman Tancred Tabone, and to the regular cash withdrawals of hundreds of thousands of euros that used to be drawn from local banks.
The last withdrawals of $250,000 and €100,000, sources told The Times, took place on January 13, just before the story on the oil scandal broke on January 20. The withdrawals in themselves do not prove wrongdoing but the directors will have to explain why they needed such large amounts.
Besides Mr Tabone, who was charged with corruption, the company includes as directors and shareholders Tony Cassar of Cassar Ship Repair and Francis Portelli, managing director of Virtu Ferries, who both also face bribery charges.
Their cases are separate from the allegations of kickbacks on oil tenders.
At one point, the company included as a silent partner Frank Sammut, the petrochemist first implicated in connection with the oil scandal after he was accused of taking kickbacks in the purchase of oil for Enemalta. However, he was bought out of the company in 2005 after he was accused of stealing by the other directors.
Both Mr Tabone and Mr Sammut were silent partners in the company, which sells oil to ships and provided barging services to Enemalta, while they respectively held the positions of chairman and consultant at the corporation.
Besides these businessmen, the police also charged Enemalta’s former financial administrator Tarcisio Mifsud and a member of the oil procurement committee, Alfred Mallia.