LOWENBRAU FACTORY

Changes to property agreement done behind Lands Commissioner’s back

After it was confirmed that I was not part of any deal Owen Bonnici and his lying government started to invent things that the Auditor General had never said

Changes in the requirements for a Löwenbräu property in Qormi, altering the very nature and value of the land in question, was done so without the knowledge of the then Commissioner for Lands and former Parliamentary Secretary for Lands, Shadow Minister for Justice Jason Azzopardi said.

A National Audit Office report on the matter found several shortcomings in the process by which the conditions tied to the land were removed, as well as the subsequent valuation to settle the matter being valued by 1990 standards rather than a 2012 valuation.

The site in question is the Löwenbräu brewery and the case dates back to 1990, when the land was allocated to the brewery company on a perpetual basis, against an annual, non-revisable ground rent of Lm10,000 (€23,294). Jumping ahead to 2009, Löwenbräu redeemed the ground rent for €465,875 while the government had agreed to cancel the conditions attached to the site – mainly that it was to be used for the production of alcohol. Throughout all this, Vassallo Builders Group Ltd acquired Löwenbräu, therefore the former were negotiating with the government to correct any inconsistencies.

The Government Property Division (GPD)’s decision to remove such a requirement has been the subject of much controversy, in view of the fact that such a decision was taken in a matter of days and the normal protocol was not followed. In its findings, the NAO report found that such a decision being taken so quickly would point towards pressure being exerted, either from the parties involved or from third parties. It stressed that the decisions taken were not ultimately in the government’s interest. More so, the decision to free the land of all conditions and redeem the ground rent goes against protocol which requires that the site be up for a public tender or the issue be taken to Parliament.

Jason Azzopardi, Parliamentary Secretary for Lands, at the time, is therefore being heavily criticised by the government for exerting his influence, highlighting an NAO observation that political responsibility should be shouldered.

Speaking yesterday with The Malta Independent on Sunday, Dr Azzopardi highlighted that it was he himself who initiated legal proceedings against the Zaren Vassallo, being part of Vassallo Builders Group Ltd, in order to rectify any wrongdoing that had occurred.

Dr Azzopardi explained that in March 2011, then Commissioner for Lands Albert Mamo called Dr Azzopardi to inform him that two years before, a decision had been taken to re- move the conditions associated with the Löwenbräu site behind his back, while he was on sick leave. It was said that GPD Notary Keith German carried out the contract of redemption of perpetual ground and the removal of the conditions.

Dr Azzopardi said that he telephoned the Advocate General in order to see how to proceed, resulting in a judicial letter calling on Mr Vassallo to pay the value of the conditions removed in 2009. Following this, legal representation from both sides met to come to an agreement, which is when a committee of three architects were nominated to establish the value of the condition removed.

He said that they estimated the value of the conditions to be roughly €700,000, following which the difference between the redeemed ground rent and this figure had to be paid by Mr Vassallo.

The NAO report however, states that:

“Ultimately, the parties agreed that a Committee was to be appointed to establish the freehold value of the land in Qormi as at 1990. This Office [NAO] deems the application of 1990 rates as fundamentally flawed, particularly in view of the fact that the site comprising developable land of approximately 20,000 square metres was valued at €706,400. The NAO considered this valuation as grossly understated and misrepresentative of the true value of this land.”

In a statement previously issued by the architects who formed part of the committee, they said:

“As is stated in our report of January 2012, we were given the brief to estimate the free market value of the perpetual emphyteusis in 1990, without the condition that was imposed in the original emphyteutical grant, that is, that the said land be used for the construction of an industrial building only for the production of beer.

“We were required to value this particular condition in the emphyteutical grant, and not to estimate the fair market value of the land in 2012; and this because the perpetual emphyteusis had already been redeemed by the emphyteuta, in accordance with the Law.”

It is unclear as to why the NAO and Dr Azzopardi and the architects have conflicting reports of what the architects were tasked to do.

The NAO, further down in its report, questioned why then Parliamentary Secretary for Lands did not take direct action at first, but stated that:

“Notwithstanding this, under the premise that the Minister MFEI, the PS Revenues and Land and the CoL were originally unaware of what went on in 2009, then the prompt corrective action taken is commendable. The matter was immediately brought to the attention of the Minister MFEI and the PS Revenues and Land, who in coordination with the DG GPD and the CoL referred it to the Attorney General.”

In light of this, Dr Azzopardi said that he will be filing for libel proceedings against Justice Minister Owen Bonnici for his “obscene lies” and because he had “conveniently” left out a number of parts of the story.

Justice Minister Bonnici, in a press conference on the matter, called on Opposition leader Simon Busuttil to make good on his promise to sack officials that have been caught up in wrongdoing, and urged him to remove Shadow Minister for Justice Jason Azzopardi.

The basis of such a call for action stems from the same NAO report which highlighted serious shortcomings in a 2012 land transfer deal between the former Nationalist Party (PN) government and the Vassallo group over the Löwenbräu site in Qormi.

The Lands Commissioner took issue with this and found a breach in the protocol as laid out by law, and sent a letter to Zaren Vassallo, from Vassallo Ltd who had been attempting to buy the land from Löwenbräu.

Dr Bonnici claimed that upon receiving the letter, Mr Vassallo went straight to then Minister Jason Azzopardi, where he was told a compromise would be reached.

In the end, a contract of exchange was signed with the value of the land set at €706,400, based on estimates dating back to 1990, Dr Bonnici said, calling it a “mediocre estimate.”

He continued to say that the correct valuation in 2012 was that of €8 million. The NAO report had stipulated that Dr Azzopardi “shoulders an element of responsibility for the serious shortcomings noted in 2012, for he was aware of, yet failed to question, the grossly misrepresentative value of the land.”

Dr Bonnici highlighted the numerous times that Opposition leader Busuttil had proclaimed that he would not hesitate to remove any deputy that is found to have carried out any form of wrongdoing, and therefore called on him to practise what he preached.

In a statement issued to all newsrooms, Dr Azzopardi said that “Owen Bonnici and the most corrupt government in history” are so desperate to defend themselves from the scandals engulfing the government that they are not believing the Auditor General and inventing things he did not say.

“The Auditor General found nothing wrong in my regard, so much so that Michael Falzon had attacked him” for taking a different approach in his regard.

“After it was confirmed that I was not part of any deal – contrary to what Joseph Muscat and Konrad Mizzi did in the Café Premier and SOCAR Azerbaijan cases – Owen Bonnici and his lying government started to invent things that the Auditor General had never said,” Dr Azzopardi said.

“Owen Bonnici is so hypocritical that 15 months after the Auditor General reported that the law was being breached in the deal reached by the government and the General Workers’ Union on property in Valletta, the Justice Minister did not take any action.”

In a statement, the Labour Party described Jason Azzopardi’s reaction as “hysterical.”