SOCAR may be dragged into a corruption and even criminal scandal

Baku/23.11.19/Turan: On  22 November Malta police detained businessman Jurgen Fenech in connection with an investigation into the murder of journalist Daphna Caruana Galizia in October 2017, world media reports.

Fenech is one of the directors of the ElectroGas Malta Consortium, in which GEM holding owns 33.34% (more than a third of this share belongs to the Tumas Maltese Company. Until November 19, 2019 the company was officially headed by Fenech, the rest belongs to the Gasan Maltese company), for Socar Trading in the project 33.33% and another 33.33% - Siemens Projects Ventures. The € 450 million ElectroGas Malta project was put into operation in 2017 regarding Malta gasification, for which gas regasification and storage facilities were built on the island. A 210-megawatt combined cycle gas power station was created, and Socar Trading became an exclusive supplier of liquefied gas for 18 years (LNG) for this project, which can cover 50% of Malta's electricity needs.

However, this project has been criticized by the European media for the last 2-3 years, as some reputable publications have reported that gas for Electrogas Malta is supplied at a price several times higher than the average price for LNG supplies to Europe.

Nevertheless, the Government of Malta is still maintaining this long-term deal with SOCAR Trading, the supply of liquefied gas continues. However, the arrest of one of the leaders of ElectroGas Malta and the investigation launched in Malta regarding the activities of this businessman could negatively affect the fate of the project involving SOCAR, as in Malta, protests are rising demanding the resignation of the Government of Malta due to suspicions of corruption.

The Reason for the Arrest of Phenec

Journalist and blogger Daphne Caruana Galizia died in a car bombing in the Maltese village of Bidnage. The journalist announced the alleged connection of the Prime Minister of Malta, Joseph Muscat and his wife, with the company appearing in the Panama Papers. She also questioned on her website that the Electrogas Malta project is fully compliant with the laws of Malta.

Eight months before the death of Caruana, Galizia wrote about the 17 Black company registered in Dubai, which, according to a journalist, could be associated with Maltese politicians. So, in one of the letters that the journalist had at her disposal, “17 Black” was called one of the sources of income for the Panamanian firms Hearnville and Tillgate, owned by Conrad Mizzi (formerly the head of the Malta Ministry of Energy) and the head of the Prime Minister’s administration, Keith Shambri.

The journalist did not have time to find out who owned “17 Black”, but later it became known that the company was owned by Fenech (in November 2018 there was a joint investigation of Times of Malta and Reuters).

Protests have been held in Malta since November 20, 2019 calling for the resignation of Prime Minister Joseph Muscat. Conrad Mizzi is currently Malta's Minister of Tourism, and Keith Chambry is the head of the prime minister’s office for this island nation.

MEP David Casa said the chair under the Prime Minister of Malta swings, and he must immediately resign so that justice will prevail.

The daughter of the deceased journalist tweeted that it is terrible that such a strategic facility for Malta as a power plant belongs to a person who is involved in corruption and, possibly, criminal acts. The Prime Minister of Malta has stood up for Chambrey and Mizzi.

Fenech is the son of the late businessperson George Fenech and comes from a family that runs one of the most influential business groups in Malta - Tumas Group (in business for about 50 years).

Tumas Group has interests in the gambling and hotel business, tourism, real estate and construction market (therefore, it was chosen in 2013 as a construction contractor under the ElectroGas Malta project).

It is noteworthy that the leak of letters in which the name of Fenech was mentioned has been lasting since 2017 from the ElectroGas Malta server.

The European journalists learned that Fenech in May 2017 received an email from a senior official of this energy consortium, which said, "The banks are nervous."

The media found out that the letter "on nervous banks" was sent shortly after Mario Pullicino (representative of the tanker fleet delivering LNG to the power plant under the Socar Trading contract) sent 200 thousand dollars to the account of "17 Black".

Interestingly, from the moment of disclosure, Mr. Fenech strenuously denies any offenses related to the Panama Papers, but does not deny possession of “17 Black.”

It is not yet clear how the current situation will affect Socar Trading’s activities in Malta, but it is worrying that the “subsidiary” of the State Oil Company of Azerbaijan may be dragged into a corruption and even criminal scandal in one of the EU states.—0-