Top story: how John Dalli bought his brother Bastjan’s concrete batching plant

THE BACKGROUND: In 1995, while his brother John Dalli was Finance Minister and the Finance Ministry was preparing to put out a call for tenders for the construction of the state general hospital, Bastjan Dalli – a drug-trafficker, whisky smuggler, and Malta contact for the Neapolitan Camorra – bought a concrete batching plant from Joe Gaffarena. Bastjan Dalli had never been involved in construction before.

The company was called Planka Ltd, but he renamed it Mixer Ltd. Meanwhile, his brother the Finance Minister pushed for the tender award to go to the Skanska-Devlands-Blokrete consortium. The various members of this consortium had their own batching plants, but they had reached an under-the-table agreement to buy their concrete from the Finance Minister’s brother. None of Dalli’s cabinet colleagues, nor the tender adjudication committee, knew about this.

Construction began in January 1996 and for the first three and a half months of that year, Bastjan Dalli supplied all the concrete. Nobody else supplied any. Konrad Mizzi and Chris Fearne said at a press conference yesterday that all the weak concrete which is the subject of the current controversy was supplied in the first six months of 1996.

Concrete mixers carrying the Devlands name used to go to Dalli’s batching plant and load up there, so that Mixer Ltd wouldn’t drive its own concrete mixers onto the construction site. This process was covertly filmed and then revealed. Devlands Ltd is owned by Jason Micallef’s uncles, brothers of the late Labour minister Freddie Micallef.

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HOW JOHN DALLI BOUGHT HIS BROTHER BASTJAN’S CONCRETE BATCHING PLANT AND THE LAND ON WHICH IT SITS

Mixer Ltd (owned by Bastjan Dalli) owed money to Bank of Valletta. Bank of Valletta sued, won the case and in 2006 obtained a court order for the judicial sale by auction of Mixer Ltd’s property: a batching plant and the 23,500sqm of land on which it is situated, in the area known as Ta’ San Martin, on the road from Haz-Zebbug to Rabat.

The judicial sale was held in 2007 and the highest bidder was an unknown individual called Neville Spiteri, whose bid of Lm1.45 million (Eur3.38 million) won. The other bidders included Joe Gaffarena, the original owner of the batching plant, who had not been paid in full for it and who had his own case pending against Bastjan Dalli.

Neville Spiteri did not deposit the full payment of Lm1.45 million in court, as required to do so. Instead, he deposited a bank guarantee issued by FIMBank on the demand of John Dalli and Associates
(Business Management Services) Limited. This is very irregular as in judicial sales you are meant to deposit the actual payment.

Neville Spiteri and John Dalli and Associates (Business Management Services) Ltd then filed a joint application to the court, asking for a correction to all acts of the judicial sale: that the name of Neville Spiteri be replaced by that of John Dalli and Associates (Business Management Services) Ltd. The reason they gave was that Neville Spiteri had not been bidding in his own name, but for John Dalli & Associates.

The court turned down their application on the grounds that the law does not allow bids on behalf of unnamed persons, and that if a representative goes there to bid on somebody else’s behalf, or on behalf of a company, he must bid in that person’s or company’s name.

Why did John Dalli & Associates do this, instead of putting in a straightforward bid in the company’s own name? The answer to that is obvious: John Dalli didn’t want his name out there in a public auction as the winning bidder for his brother’s batching plant.

Faced with the court’s torpedoing of this cunning plan, John Dalli & Associates and Neville Spiteri filed another joint application, this time as a normal case in the Civil Courts, asking for the revocation of that court decree. They also asked for the FIMBank bank guarantee to be considered as effective payment despite the rules which say that only money (cheque or banker’s draft) is accepted as payment in judicial sales.

Neville Spiteri and John Dalli & Associates filed this suit against Mixer Ltd, Bank of Valletta and other creditors of Mixer Ltd who could be considered to have an interest. Bank of Valletta fought back, putting up forceful objections.

Now this bit is really important. The case conveniently entered the case-load of Judge Lino Farrugia Sacco, who has since been disgraced and who evaded the Commission for the Administration of Justice’s recommendation that parliament move to impeach him by colluding with Prime Minister Joseph Muscat on a series of time-wasting measures until he retired a few months later. The impeachment recommendation was in respect of another case.

Farrugia Sacco ruled in favour of John Dalli & Associates and Neville Spiteri, saying that there are company minutes which “prove” that Neville Spiteri was appointed to be the company’s delegate at the judicial auction. In reality, these minutes prove nothing of the sort because they could easily have been drawn up post-factum purely to bolster the case, given that the only directors and shareholders at the time were John Dalli and his two daughters (now they are only his daughters).

Farrugia Sacco also ruled that the bank guarantee should be considered valid as payment to secure the winning bid, but that John Dalli & Associates should now deposit the Eur3.38 million required to release the batching plant and land in its name. This ruling was given on 8 June 2011.

Read the court judgement here:

Neville Spiteri vs

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AND WHERE WAS BASTJAN DALLI WHILE BANK OF VALLETTA WAS CHASING THE MONEY HE OWED THEM AND JOHN DALLI WAS DEVISING MACHINATIONS TO ACQUIRE HIS CONCRETE BATCHING PLANT?

While John Dalli was going through all these contorted machinations to acquire – I really think ‘buy’ is the wrong word here – his brother’s batching plant and land, his brother was trafficking in cannabis. In February 2009, Bastjan Dalli was arraigned in court and charged with conspiring to deal in cannabis the previous December, and violating police bail conditions when he travelled to Libya despite a specific ban on doing so.

He had, in fact, been in hiding in Libya since his fellow-traffickers were caught by police, red-handed on their smuggling vessel, the Jolly Roger, on its way in to Malta from Libya. He used more or less the same tactic his brother John used four years later, but in his case without medical certificates, simply going AWOL until he thought the coast was clear.

But the coast wasn’t clear at all, and when he returned to Malta he was nabbed, arraigned and locked up after bail was refused on the grounds that he wasn’t trustworthy.

Bastjan Dalli was also charged with carrying a firearm without a licence and relapsing.

His lawyer was Arthur Azzopardi of the law firm Emmanuel Mallia & Associates. Four years later, it was Emmanuel Mallia, now incarnated as Police Minister, who prevented the police from arraigning John Dalli on corruption charges on his return to Malta from Brussels, and who sacked, a few days later, the Police Commissioner who planned to do so.

Azzopardi argued that Dalli should be allowed out on bail because there was no risk that he would escape from Malta. “He has strong family and business ties here and he is trustworthy,” he said.

The prosecuting officer, Norbert Ciappara, pounced, saying that Dalli had already skipped bail to hide out in Libya.

Azzopardi argued back, saying that Dalli wasn’t hiding and that he had returned when asked to do so. They also said that “he could have tampered with evidence during the last few weeks, but he did not”.

Magistrate Anthony Vella turned down the request for bail and ordered that Bastjan Dalli be held on remand, saying that the case is very serious and that he was not persuaded that Dalli would not escape from Malta again.

I have no information on how that particular trial ended up.

AND WHERE WAS JOHN DALLI HIMSELF WHILE ALL THIS WAS GOING ON?

When the batching plant was sold by judicial auction in 2007 and he sent Neville Spiteri to represent his company secretly, John Dalli held no official post. He had been forced to resign as Foreign Minister in 2004 when he was discovered to have been using public money to buy tickets for ministerial travel from his own travel agency (fronted by his daughter Claire Gauci Borda).

In the years 2005 to 2008 he did only private work, operating through his company John Dalli & Associates, of which he was at the time a director and official shareholder. His daughters Claire Gauci Borda and Louisa Dalli later substituted him.

After the general election in March 2008, he was given another cabinet appointment, as health minister. Two years later, in February 2010, he took up the post of European Commissioner.

When Judge Farrugia Sacco ruled in 2011 that John Dalli & Associates should be named as the purchaser at auction of Bastjan Dalli’s batching plant, and that the FIMBank guarantee made to the demand of John Dalli & Associates was valid security for the bid, John Dalli was a European Commissioner. A year later he was forced to resign, and a year after that the New York Times blew his cover on his secret trips to the Bahamas.