The government is vehemently denying that it ever authorised any commissions in connection with the controversial €4.2 million deal through which it bought back the 65-year emphyteusis of Cafe Premier in Valletta.
However, it failed to answer questions sent by this newspaper on whether it was prepared to publish all the workings on the payment to Cities Entertainment Ltd, which owned the business.
Speculation about possible wrongdoing in this deal was fuelled by an announcement made last Monday that the government had instructed the police to probe allegations the deal might had been secured against some form of unauthorised commission.
The decision came in the wake of the comments made by Opposition MP Jason Azzopardi, who asked whether the government had been assisted by a consultant and if any commissions were involved.
The agreement between the Land Department and Cities Entertainment Ltd was struck just four months after the change of government, but the deal was only signed last January.
Its terms immediately raised eyebrows when it transpired that under this agreement the owners of the closed-down cafeteria, situated in a landmark spot of the capital, would also have their debts wiped out – from taxpayers’ money. These debts included an outstanding loan of some €2.5 million with Banif Bank, as well as income tax and VAT arrears, pending energy bills, ground rents and a number of creditors.
A government spokesman yesterday told Times of Malta that it had never authorised commissions of any sort on the acquisition of this site and nor was it aware that any commissions had been paid.
“That is why we are taking the allegation very seriously and asked the police to investigate the case right away,” the spokesman said.
Probed about the reason for acquiring Cafe Premier, the spokesman said this was in line with government policy not to have establishments which could endanger priceless documents of historical value housed in the Bibliotheca.
He added that the acquisition of this site, located on the ground level of this historic building, would make it possible to improve accessibility for the public.
The government has also been criticised by the Opposition for not taking the option of forging ahead with the court case that was instituted by the Land Department against Cities Entertainment Limited, which had acquired the governmental emphyteusis in 1998.
These proceedings were opened after the owners defaulted on the ground rent payment for a number of years.
Dr Azzopardi argued that this would have cost taxpayers nothing but acknowledged it would have been the lengthier option.
However, the government spokesman said that no court case was ever presented for the dissolution of the emphyteutical grant.
The only case that had been presented in court was back in December 2012 and was meant to recoup the arrears, he said.
He added that the Government opted to reach a settlement rather than take court action as it wanted to acquire the premises for the reasons stated above.
“Court action for the dissolution of the grant would not necessarily have given this result, as there is nothing in the original emphyteutical deed which would have prevented the emphyteuta from selling their business,” the spokesman said.
The spokesman confirmed that all arrears and the monies due to government were paid as part of the agreement reached.
When contacted, a Cities Entertainment spokesman disputed some of the facts previously reported by the media but declined to specify what these were and would not comment further.