An appeals court yesterday reduced a jail term handed down to a private investigator who had been found guilty of fabricating a report in which he claimed irregularities in the allocation of a Mater Dei Hospital tender.

Mr Justice David Scicluna, sitting in the Court of Criminal Appeals, reduced the sentence of Joseph Zahra, 57, of Marsascala by seven months, jailing him for 17 months instead of for two years.

Mr Zahra had been arraigned in 2004 and found guilty two years later, after he drew up two reports which, among other things, implied that the brother of then Foreign Affairs Minister John Dalli, Sebastian, had bribed the then Director of Contracts Joseph Spiteri, through Mr Spiteri’s daughter Claudine Cassar, to be awarded the €58 million contract for the supply of medical equipment to the hospital.

The reports, along with separate allegations of embezzlement in the way airline tickets were bought in the Foreign Affairs Ministry, led to Mr Dalli’s resignation in 2004.

The reports had been commissioned by one of the three prospective bidders for the tender.

In 2006, Mr Zahra had been found guilty of filing a report against people he knew to be innocent and spreading false news that could alarm the public when he compiled the report dated December 25, 2004. He was also found guilty of simulating an offence, fabricating evidence and false news, defaming several people and working as a private investigator without a licence.

However, he appealed the two-year jail term and listed eight arguments, requesting the court to revoke his punishment and clear him of the charges.

But Mr Justice Scicluna only upheld two of Mr Zahra’s claims. He noted that Mr Zahra could not have been accused of simulating an offence, which excluded any specific accusation against people, because Mr Zahra had actually named people in his reports.

He also accepted Mr Zahra’s argument that he could not have been charged with spreading false news that could alarm the public because it was never proven that he actually did “spread” the news.

Mr Zahra also pointed out that he had been charged under two different charges in the Press Act which were judicially distinct from each other and were of different criminal intent.

In his judgment, Mr Justice Scicluna said Mr Zahra could only have been found guilty of one.

He cleared him of simulating an offence and spreading false news and reduced his two-year jail term to 17 months.

The case goes back to 2003, when Mr Zahra was commissioned by Simed International – one of the two companies which failed to win the hospital equipment tender – to look into why the contract had been awarded to its rival Inso.

In the report Mr Zahra claimed that Ms Cassar, the daughter of the former director of contracts, had met Inso representatives and spoken with Mr Dalli’s brother Sebastian.

The report alleged that following several meetings held abroad between Ms Cassar, Mr Spiteri, Mr (Sebastian) Dalli and foreign men, the Mater Dei Hospital tender was awarded to Inso.

The report also claimed that the people mentioned in the report received large sums of money once Inso won the contract.

The reports were handed to Prime Minister Lawrence Gonzi who ordered an investigation and asked the police to look into them. When the police started investigating, Mr Zahra admitted he had invented the report because he did not have hard facts to present to his client even after he had accepted payment.

Then, in 2007, after public insistence by Mr Dalli, the Prime Minister publicly rehabilitated Mr Dalli and appointed him his personal consultant, saying that allegations against him had been disproven.

After the 2008 general election, Mr Dalli joined the Cabinet again as Social Policy Minister before being nominated European Commissioner last February.