Mark Gaffarena is again threatening the owners of part of a property in Old Mint Street, Valletta, with legal action if they do not complete the sale with him within a week.
Mr Gaffarena applied for an injunction against the Cefai family last week, but the judge ruled against his request. Mr Gaffarena’s aim was to stop the Cefai family selling their share of the property to the government.
In court, Mr Gaffarena’s lawyer argued his client wanted to “protect his rights” in the promise of sale agreement on a quarter of the Valletta property at the centre of a controversial expropriation that is the subject of two investigations.
The Sunday Times of Malta revealed last month that the government expropriated half the property from Mr Gaffarena for €1.6 million when he had bought a share for a fraction of the price just a few weeks earlier.
The government dealt only with Mr Gaffarena, never negotiating with the other owners of the property having their own share of the building.
While the government was dealing with him, Mr Gaffarena was busy arranging promise of sale agreements with the other owners of the property in the knowledge that the government intended to expropriate it.
The promise of sale agreement is for €139,762, while the government will pay €822,500 for expropriating the same share. When the agreement was signed, details of the expropriation had not yet emerged.
The promise of sale agreement signed between the Cefai family and Mr Gaffarena was set at that price because the government has been renting the property for close to nothing since 1902.
The agreement also states the building was not subject to an expropriation order.
If you fail to turn up, you will face legal action
When the government bought the other half of the property from Mr Gaffarena, the declaration of expropriation was only issued after he had acquired the share. On a quarter of the property he sold to the government, Mr Gaffarena made a profit of €685,000 within a few weeks.
In the legal letter sent to the Cefai family on July 8 – less than a week after the court’s ruling against the injunction he sought – Mr Gaffarena’s lawyer, Kenneth Bonnici, gives the family one week to complete the sale.
“If you fail to turn up, you will face legal action,” Dr Bonnici states. This is the second time Mr Gaffarena is calling the Cefai family to sign, when they have already made it clear in court that it would not be “prudent” to close the sale now before the results of the two investigations are known.
The promise of sale agreement expires next year. The Cefai family has already argued Mr Gaffarena’s sudden rush to complete the sale only happened after the revelations in The Sunday Times of Malta.
The Cefai’s caution is also based on a tax investigation faced by other owners of the property – the Mercieca family – who already sold to Mr Gaffarena for the same price offered to the Cefai family.
Since the government paid a much higher price for the same property within a few weeks, it is the government architect’s evaluation that the tax department considers as the true value.
The Mercieca family now faces a tax bill that can amount to more than the amount they received for the sale of their share to Mr Gaffarena. This is the scenario the Cefai family faces if they too proceed with the sale.