The property in Old Mint Street, Valletta. Photo: Jason Borg

When Mark Gaffarena offered to sell to the government part of a Valletta property at the centre of a controversial expropriation he still did not own it though he then made a profit of €685,000, government documents show.

The Sunday Times of Malta revealed that the government paid €1.65 million to expropriate half of a property in Old Mint Street through two contracts signed with Mr Gaffarena.

Mr Gaffarena was paid €822,500 in land and cash for a quarter of the building he owned last January. Then, on February 13, Mr Gaffarena offered to sell another quarter of the property to the government. He actually sealed the purchase of this part on February 26, having signed a promise of sale agreement for it last October. He bought this part for €139,762 and then got another €822,500 in land and cash from the government, the same payment he was given under the first contract. The declaration for expropriation was issued on April 8, after Mr Gaffarena had acquired the property. The previous owners had not been informed of any expropriation.

The deals had been approved by Parliamentary Secretary Michael Falzon on behalf of the government. Replying to questions, Dr Falzon said he signed all government expropriations, as was normal practice.

Gaffarena made profit of €685,000

“In this case, the exchanges were signed after all the legal and administrative obligations were duly observed. Following that, the appropriate valuations had been carried out by the Government Property Division’s architects,” he said.

He said exchange of legal correspondence on the property had been going on since 2005 and insisted the government would have lost the property in 2028 had it not acted.

Independent architects who spoke to this newspaper said they had never witnessed such a fast expropriation. Some property owners said they were still waiting to be paid for land government expropriated decades ago.

In his formal written offer, there was no indication of his actual share

The ownership of the 445 square metre property was split into four parts, each owned by different parties. The government has admitted it never entered into negotiations with any of the other owners.

Dr Falzon said Mr Gaffarena first offered his share of the property last July. “In his formal written offer, there was no indication of his actual share,” he pointed out. Dr Falzon also noted that the promise of sale agreement Mr Gaffarena signed for the second part was done before his first sale to the government in January.

Mr Gaffarena is one of the owners of a controversial petrol station in Qormi that was forced to shut down under the previous administration because of illegalities. Soon after the Labour Party was elected, a Mepa policy change allowed its use – it was the only petrol station to benefit from the policy.

Mr Gaffarena has applied to build a 31 square metre food and beverage outlet with six car washes on the same site.

When this newspaper called Mr Gaffarena’s mobile number, the person who replied said he was his brother and that his sibling was not available.