Updated Thursday 12pm with Lands Authority reaction
Lands Authority CEO James Piscopo only flagged his personal business interests and potential conflicts of interests a day after receiving questions by Times of Malta.
The regulator’s chairman, Judge Lino Farrugia Sacco, confirmed that the board of governors was informed by Mr Piscopo about his business interests on September 28. Mr Piscopo was appointed in July.
A set of questions on business partners and his potential conflict of interest in negotiations with the Fortina Hotel shareholders were e-mailed to Mr Piscopo On September 27.
The Sunday Times of Malta reported that Mr Piscopo owned shares in two private companies together with the owners of the Fortina Hotel.
Judge Farrugia Sacco said Mr Piscopo informed the board of his interests in two companies and that he had sold his stake in one of them and was in the process of selling his shares in the other.
Upon Mr Piscopo’s request, the board “felt that he should not be involved in negotiations with the Fortina Hotel”, the chairman added.
Questions to the chairman on whether Mr Piscopo’s ‘disclosure’ was made within the parameters of the law and if the board would be taking action against the CEO over a potential infringement remain unanswered.
He should not be involved in negotiations
According to the law governing the Lands Authority, as CEO, Mr Piscopo was obliged to inform the board of governors and the responsible minister (Ian Borg) of his conflict of interest “upon becoming aware of such interest”.
Mr Piscopo’s predecessor at the Lands Authority, Carlo Mifsud, last April publicly declared that the regulator and the Fortina were in “advanced negotiations” over a clause precluding them from using land they bought from the government for any commercial development unrelated to the hotel extension.
The Zammit Tabonas, who own the hotel, want the Lands Authority to change the clause so they would be able to build a mega office block, which they have already agreed to sell for over €60 million to a giant international gambling company.
If the request is accepted, the market value of the land in question will rise by tens of millions of euros. The lands watchdog is negotiating the quantum of compensation to be paid by the Zammit Tabonas.
Then chairman of Transport Malta, Mr Piscopo had, in 2016, incorporated Undecim Five Investments Ltd as a private consultancy firm, later investing in BBF Ltd and Floors of Stone Company Ltd. The Zammit Tabonas have shares in both companies.
When asked about the matter, Mr Piscopo admitted he was in business with the Fortina shareholders but said he was divesting his investments.
Insisting he was not leading the talks with Fortina, he said he had already sold his shares in BBF Ltd and was in the process of disposing of his interests in Floors of Stone Company Ltd.
He pointed out that no decisions had been taken on the Fortina negotiations since his appointment.
Questions sent to minister Ian Borg, who is politically responsible for the Lands Authority, on whether he was aware of Mr Piscopo’s private business interests remained unanswered at the time of writing.
Board replies to conflict of interest claims
In a reply sent to Times of Malta, the authority's board of governors said it had received the explanation given by the CEO and it is satisfied with the explanation given, particularly the timely proactive action taken by Mr Piscopo in selling his shareholding to eliminate any potential perceived conflict.
“The board has also accepted Mr Piscopo's request not to involve himself in discussions with Fortina Group.”
Editorial note: The Lands Authority chairman was quoted in the item in question saying the CEO had informed the board of his interests in two companies and that he had sold his stake in one of them and was in the process of selling his shares in the other. The chairman also said the board “felt that [the CEO] should not be involved in negotiations with the Fortina Hotel”.
The report added that questions to the chairman on whether the CEO’s ‘disclosure’ was made within the parameters of the law and if the board would be taking any action against him over a potential infringement remained unanswered.
The Times of Malta still awaits a clear reply to these questions.