‘Muscat should resign over €4.2 million Premier bailout’ – Fenech Adami

Muscat responsible for €4.2 million Cafe Premier bailout - PN

The Nationalist Party said that Prime Minister Joseph Muscat should resign over a €4.2 million bailout for private company Cities Entertainment, after he personally entered negotiations to buy back the 65-year lease for the site occupied by the Café Premier in Valletta.

The declaration by deputy leader for party affairs Beppe Fenech Adami came after the National Audit Office issued a damning indictment of the ‘bailout’ – the money was used to pay back the state’s dues and the company’s private debts.

“The government decided to solve the problems of a private company using tax money – the prime minister is politically responsible... I challenge the prime minister to explain whether he met Cities Entertainment before the election, especially given the café was closed on 8 March, the eve of the election.”

Fenech Adami said the Café Premier bailout was carried out under the direct intervention of the Prime Minister, and that the NAO found no reasonable justification for the expropriation of the cafeteria, ostensibly for the protection of the national library.

He said the NAO report was a categorical condemnation of the prime minister’s actions in negotiating the €4.2 million re-acquisition of the public lease. “This matter stinks, especially given Muscat’s involvement – nowhere else does a prime minister intervene personally in such a matter.”

“Muscat went out of his way to bail out CE – and he should explain what pre-electoral meetings took place to pay €4.2 million so that CE pays back its VAT, energy bills, its loans to Banif, creditors, the notary, and the commission,” Fenech Adami said.

Fenech Adami said he also expected the police to investigate the case if they felt that the matter merits a criminal inquiry, referring to a 5% commission on the acquisition value paid to one of Cities Entertainment’s shareholders, M&A Investments.

Shadow justice minister Jason Azzopardi decried the “scandalous, obscene” priority given to the Café Premier lease so soon after Labour was elected to power in April 2013, and for eschewing all consultation with the government property department.

Azzopardi said Muscat should answer for the fact that another third party was offering a similar offer to that of the government’s – a fact made known during the NAO inquiry – suggesting that Cities Entertainment could have easily transferred its lease on the market.

“The ‘callous governance’ – as pointed out by the NAO – in reclaiming Café Premier was unjustified. A year later, no works have been carried out beneath the Biblioteca to improve access or remove any hazard beneath the national library,” Azzopardi said.

Planning spokesperson Ryan Callus said the same NAO report rubbished government claims of a fire hazard beneath the national library, having found no gas cylinders inside the catering establishment. “Neither was there a technical or financial analysis of whether vertical access into the library was feasible or not,” the MP said.