The short story of Graham Couser is that he was engaged by Malta Shipyards in January 2006 as a marketing executive only to resign six months later.

The long story is that he was the key person who negotiated the two ship conversion contracts with Dutch company Fairmount, which led to the shipyard losing €37 million, derailing the little progress the company had been making after restructuring in 2003.

Mr Couser's name surfaces at least 28 times in the 161-page report drawn up by PricewaterhouseCoopers, the private audit firm entrusted by the government to investigate what led to the two major contracts becoming loss-making operations.

His whereabouts were unknown to this firm during the course of their investigation but the report singles out Mr Couser as "the key person involved in dealing with FHT (Fairmount) in the preceding weeks before the signing of the contract".

In fact, Mr Couser was the other signatory alongside Malta Shipyards CEO Chris Bell on the contract for the works on the Fjord, which was the first ship to dry dock in Malta.

The report says it is unclear in what capacity Mr Couser signed off the contract.

Previously an employee of Grand Bahama Shipyard, Mr Couser reported directly to Mr Bell. He had previous experience in ship conversion projects, deemed to be an asset in the new work the shipyard was trying to attract in its bid to diversify.

However, the report says that although Mr Couser's role was primarily one of attracting new opportunities to the shipyards, he also became actively involved in contacting subcontractors for quotes.

The report comments on an e-mail Mr Couser sent to a "subcontractor colleague of his" in which he said: "Things here are very different, to put it bluntly!! Anyway, they are making a big mess of a final negotiation for a conversion and they have put prices into their offer that have no substance, never a good practice, but the client is interested, which makes me very suspicious indeed!"

The e-mail was sent barely two weeks before the Fjord contract was signed and PWHC commented that if Mr Couser felt the quoted price was too low then he would have had no reason to be suspicious.

"On the contrary, it appears he felt that the initial offers of €29.3 million and subsequently €24.8 million for the Fjord were inflated," the report concluded.

The final contract for the conversion of the Fjord was signed on March 9 for €19.8 million while the price quoted by Malta Shipyards for the conversion of the second ship, the Fjell was €13.4 million.

Former chairman John Cassar White, who was not interviewed by PWHC, would not comment about the investigation.

"I do not feel it is prudent for me to comment at this stage," he said when contacted.

The audit firm did not seek reactions from the board of directors either but made it clear the board may have been misled by the executive management.

By focusing excessively on the revenue generated by the two contracts the management provided unrealistic "expectations of profit-contribution" when it was very unlikely there would have ever been profit at the negotiated price.

The misjudgment on the first high-risk project, the auditors said, was repeated even on the second one when management "bet the bank" and took on the job for a lower price.

The report insisted the Fairmount contracts were worded in a way that gave the client the "upper hand" in most situations.

What in the words of Mr Bell had to be a "good contract and value" eventually turned out to be a complete flop that racked up losses rather than raking in profits.

The Investments Ministry, which published the report, has not yet said whether it intends taking any civil action against those involved in the massive failure.

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