Constantly updated - most recent at the bottom - Oil trader George Farrugia this morning described in court how his brothers were involved in the commissions paid for oil procurement contracts and had even signed some of the cheques.
He was giving evidence in court in the compilation against his brothers brothers who are denying involvement in kickbacks paid in connection with the procurement of oil and fuels to Enemalta.
A police inspector yesterday told the court that George Farrugia used to bribe Enemalta officials with the full knowledge and consent of all but one of his brothers. He said the brothers had admitted knowing that commissions were being paid, but did not know to whom.
At the beginning of his evidence this morning, George Farrugia said that he was a director of John's Group together with his brothers. The group encompasses John's Auto Care, JF Motors, Sunrays travel and tourism and Power Plan Limited. He was a director until 2010.
Today they also have another company on importation of lubricants.
Power Plan started operations in 1995 with importation of equipment for petrol stations and then started importing Total lubricants.
He said he had good relations with his brothers.
When Malta started working towards EU membership, he started seeing how to expand the business once the fuel market was liberalised. He began negotiations with Total on oil storage and spoke to Alfred Mallia who was head of the Enemalta Petroleum division. He requested splitting the profits.
Then he had spoken to Mr Mallia again to see if Enemalta was prepared to sign an agreement with Total and it was then that Mr Mallia asked him for a slice of the profits.
Mr Farrugia said he had spoken to his brothers to told them that Mr Mallia had asked for a commission and they agreed and gave the go-ahead.
"There was a board meeting and they were all informed about it. At the time it (the commission)was only 12c per ton per month on the storage. My duty was to find new clients to buy diesel from Total."
One possible client was MOBC which was involved in bunkering, so he approached Frank Sammut, but Mr Sammut refused to meet him. One fine day, he approached him again and they went for a drive. Mr Sammut asked him what was in it for him. He wanted a cut. He offered him half of the commission equivalent to 50c of a dollar per metric ton.
He informed his brothers about it.
Mr Farrugia said some of the payments was in the form of a Korando car as Sammut wanted to buy a car for his son.
There were some contracts of 5,000 tons of diesel a month.
He did not remember how long this agreement stood.
At a later stage, he spoke to Sammut about storage of fuels for Trafigura but Mr Sammut wanted to speak to the company representative directly. There was a meeting with Tim Waters in Mr Sammut's office and at one point Mr Sammut asked him to leave the meeting as he wanted to speak to Mr Waters alone. During the meeting he asked him for a commission. This was at the end of 2003.
Mr Farrugia also recalled that towards the end of 1999, there was a port strike and since Total stored oil here and Enemalta could not take delivery of fuels, M Mallia had asked him whether Enemalta could purchase 20,000 tons of diesel held in storage tanks at Has Saptan.
Mr Mallia had asked him for half the commission, and therefore, Mr Farrugia said, he had informed some of his brothers.
There was another tender towards the end of 1999 that was won by Total and Mr Mallia wanted his share too.
Early in 2000, Mr Mallia suffered a traffic accident. When he visited him in hospital, he told told him to go speak to Tarcisio Mifsud, at the time head of finance at Enemalta, based at the Marsa power station.
When they met, Mr Mifsud told him (Mr Farrugia) that to hand him what he used to hand Mr Mallia.
Mr Farrugia said some payments were issued by cheque from Power Plan accounts. There were two signatories on the cheques, his and one of his brothers.When he worked in Hamrun, most cheques were signed by Raymond and when he moved to the Qormi office the other signatory was either Saviour or Antoine.
One day, Mr Farrugia said, the auditor told them that payments without documents or invoices could not be issued any longer. It was probably during a board meeting but he could not remember whether the brothers were there.
Mr Farrugia said he discussed with his brothers whether they should continue in this business. He had told themhe would find a solution and it was agreed that he would keep 20 per cent of income related to oil trading.
To bypass this problem, he had set up Aikon Limited and opened a bank account in Switzerland.
"I admit I was not transparent enough with my brothers bit thanks to this arrangement my brothers were getting paid," he said.
One day, he said, he went to Geneva and paid $20,000 in cash to Tancred Tabone, (former chairman of Enemalta).
His brothers knew that commissions were being paid, and even who was being paid, Mr Farrugia said.
"They knew everything but I was not transparent enough with them."
Mr Farrugia said he started dealing with Mr Tabone after he found out that Mr Sammut and Mr Tabone were sharing the commission Mr Sammut was receiving.
One day, Mr Tabone told me to stop paying Tarcisio Mifsud and when Mr Mifsud retired, payments continued being paid to Mr Tabone. When Mr Sammut stopped working for Enemalta, Mr Tabone told me he wanted Mr Sammut's share.
Mr Farrugia said Power Plan was profitable and used to make up for losses of other companies. Commissions were listed as company expenses.
There was an occasions when one of his brothers - he didn't know if it was Raymond or Antoine - accompanied him to Mr Mallia's house to hand over a payment.
Mr Tabone stepped down as chairman in 2005 but contiued asking for commissions until 2006, claiming he still had contacts inside Enemalta.
Mr Farrugia said that one fine day he decided to stop paying him the commissions. There was no opposition from his brothers except when Raymond discussed with Mr Tabone car rentals for Forestals and would then ask him whether I was paying him (Tabone).
Then Ray Ferris came into the picture during the Enemalta privatisation. Mr Ferris had told me he could influence the decision and Mr Farrugia said he had given him three silver centrepieces. Mr Ferris told him that if Power Plan won the contract, he would have to pay him €40,000. The centrepieces were purchased by Power Plan and were delivered to the office. Mr Farrugia said his brothers knew about them.
There were a few cheques that he did not sign and two of his brothers would have signed.
Mr Farrugia said it was not easy at all for him to be testifying against his own brothers but since he was under oath, he had to say the whole truth.
There were times, he said, when Anthony Debono was a company consultant supposedly for a restructuring of the (John's) group's companies. Mr Debono told his that he (Debono) was to be appointed ambassador and the group could get more business. he then asked for money.
Mr Farrugia said he felt the group was paying Mr Debono enough so he never gave him money.
He had told one of his brothers, told Saviour that Mr Debono was asking for money. Tony Debono then told a common friend, Ronnie Agius, that he wanted to finish him (Mr Farrugia) off.
Mr Farrugia said Tony Debono also called his (Farrugia's) lawyer, Sigfried Borg Cole and threatened him. This was while he was abroad during the World Cup of 2010. Tony Debono, he said, with the complicity of Chris Farrugia, the son of his brother Antoine, had accessed the hard drive of his computer at work and the hard drive was circulated to the media.
Asked by the court for a total amount of kickbacks paid, Mr Farrugia said Aikon had paid approximately $500,000 to Mr Sammut and Mr Tabone. Some Lm40,000 (92,000) were paid to Mr Mallia and Mr Mifsud from the Power Plan account.
He said his brothers did not know about Aikon Limited. They asked him no questions when the commissions stopped being paid by Power Plan. It was business as usual. They never questioned what was the solution he had found to the problem presented by the auditors.
He resigned from Power Plan in September 2010 out of his own free will.
At the end of the sitting Magistrate Miriam Hayman said she had found enough evidence for the case against the Farrugia brothers to continue.