ITS advisers also provide services to Seabank Group
Seabank, Projects Malta decline to reply on potential conflict of interest
The audit firm engaged by the government to advise it on the value of the ITS land in St George's Bay has been providing services to various companies associated with the (db) Seabank Group and its owner, Silvio Debono, for a number of years, Times of Malta is informed.
Publicly available information lists Deloitte as the provider of auditing services to at least six companies associated with Mr Debono's business group. MFSA records list Deloitte as the auditing firm of Hotel San Antonio Ltd, Porto Azzurro Ltd, Porto Azzurro Resorts Club Ltd, Vista Promotions Ltd, SA Marketing Ltd and DB Catering and Events Ltd.
Malta Financial Services Authority records list Deloitte as the auditing firm of Hotel San Antonio Ltd, Porto Azzurro Ltd, Porto Azzurro Resorts Club Ltd, Vista Promotions Ltd, SA Marketing Ltd and DB Catering and Events Ltd.
Some of these companies are directly owned by SD Holdings – the mother company owned by Mr Debono, which now also owns the ITS site – while the others include Mr Debono and members of his family as shareholders.
Deloitte was directly selected by the government, after the bid was closed, to come up with a valuation for the land in St George's Bay, deemed to be among the most valuable development land left on the island.
Departing from the usual method of land valuation, Deloitte came out with an "innovative" method, which has been harshly criticised by various quarters, including the Malta Developers' Association, the Malta Hotels and Restaurants Association, the Chamber of Commerce, Enterprise and Industry and the Opposition.
Following Deloitte's €56 million valuation, the government negotiated a deal with the Seabank Group to sell the prestigious land for a premium of €15 million spread over a number of years. The Paceville master plan had valued the land at €200 million.
Though the original government call was for a leisure and tourism related project, the final deal struck with the Seabank Group permitted the construction of two high-rise residential towers, which will include 209 luxury apartments.
The deal, led by Projects Malta under the stewardship of Minister within the Office of the Prime Minister Konrad Mizzi, is now being investigated by the National Audit Office following a request by the Opposition.
Asked to confirm whether the SD Group or any of its subsidiaries are currently clients of Deloitte, a spokesman for the audit firm initially asked for some time to compile the data.
However, when pressed for a reply a few days later, Raphael Aloisio, a senior partner at Deloitte and the author of the valuation report on the ITS proposals, said: "Our obligations to client confidentiality prevent us from providing any comment on this matter."
Asked whether Deloitte had signalled its potential conflict of interest to Projects Malta – the government agency which gave them the ITS assignment – Mr Aloisio did not reply.
Both the Seabank Group and Projects Malta also declined to reply on the potential conflict of interest.
A spokeswoman for Projects Malta said that Deloitte “were requested by the government to provide technical assistance in reviewing and assessing the various aspects of the [Seabank] proposal and to provide Projects Malta with technical input to support us in determining the indicative range of fair values which may be attributed to the land in the context of the proposed development project”.
According to Projects Malta, Deloitte were selected by the procurement committee in line with public procurement procedures.
So far, Projects Malta has declined to list the members of the procurement committee.
It is not yet known how much Deloitte was paid for the job, as according to Projects Malta, “invoices had not yet been raised”.
Asked to state how much Deloitte had been paid by the Seabank Group and its subsidiaries for services since 2014, the Seabank Group did not reply. Following the signing of the contract on the ITS land last month, Prime Minister Joseph Muscat said the Seabank Group was paying €60 million for the land.
However, when the contract was published, it resulted that the group had only paid €5 million upon the conclusion of the contract, with another €10 million to be paid in instalments over seven years.
Also, the government conceded that outstanding payments would be interest-free, while the ground rent was slashed from €1.5 million to just €1,000 until the project’s completion.