Police to investigate Premier commission payment claim

The government said yesterday it has asked the police to investigate an allegation made in MaltaToday about the payment of a commission for the acquisition of the former Cafe’ Premier in Valletta.

The government claims it reached an amicable settlement for the acquisition by the government of the cafe’s 65-year emphyteusis for €4.2 million.

The landmark cafe’, which has closed down, was €307,346 in arrears to the government property division; €504,000 in capital gains tax; €192,748 in income tax and social security payments; €227,058 in VAT; €130,963 in energy bills.

Speaking to MaltaToday on Sunday, Jason Azzopardi, the former minister for lands, said the government must “come clean and publish all the workings” on a €4.2 million payment to Cities Entertainment Limited, to vacate Café Premier, after choosing to stop the court action against the company to pay some €200,000 in arrears.

“I limit myself to some observations, which need answers: was the government assisted by a consultant? If so, who and how much was he paid? Were there any commissions involved?” Azzopardi asked.

The payment was used to settle all outstanding income tax and VAT dues, energy bills and capital gains tax for the State, and a further €2.5 million balance on loans taken out with Banif Bank.

Under the ‘bailout’, the government has now acquired Café Premier and its ‘Great Siege 1565’ waxworks attraction on Old Theatre and Old Treasury streets.

The government says this was an “amicable acquisition” of the emphyteutical grant, after a decision to remove any hazard that the catering establishments in the area could pose to the treasures housed in the Biblioteca, above Pjazza Regina, and that it intends to construct an elevator to the Biblioteca.

But under the deal, the government ended up paying monies that Cities Entertainment owed the State and to their bank.

The government is claiming that even if it appropriated the cafeteria forcibly – through an expropriation – to protect the historical Biblioteca, it would still have had to pay out some form of compensation.

What is unanswered is why the government did not rescind the emphyteutical grant when it learnt that the café had ceased operating, and that the owners were negotiating with third parties to sell the business, both of which are not permissible according to the original emphyteutical deed.

In 2012, Cities Entertainment was paying just over €93,000 in annual ground rent to the Lands Department but also wracking up enormous debt from its operation.

In July 2013, lawyers from both Cities Entertainment and the Commissioner for Lands told the courts that an agreement had been reached to cease all court action for payment of arrears.

Instead of forging ahead with court action to recoup the arrears, or even dissolve the emphyteutical grant, the government paid the €4.2 million to Cities Entertainment on condition that it pays back: €307,346 in arrears to the government property division; €504,000 in capital gains tax; €192,748 in income tax and social security payments; €227,058 in VAT; €130,963 in energy bills; and also €210,000 to the company’s own shareholders M&A Investments and €3,265 to creditors Golden Harvest.

Finally, another €2,560,800 was paid to Banif Bank, in settlement of the outstanding bank loans that Cities Entertainment held with the bank, payable in four instalments.

The deal also cancels out all arrears and court action that various government departments filed against its shareholders and directors. The shareholders are Cabellero Entertainments Ltd (Neville Curmi and David Curmi), Daneta Limited, Impact Limited (Christopher Grima) and Jamco Limited and M&A Investments (partly owned by Mario Camilleri).