This is the first in a series by Godfrey Leone-Ganado reviewing what is known of Electrogas and identifying oddities that may perhaps only be answered by a proper 17 Black inquiry.
In the light of the recent revelations on 17 Black, the Dubai money laundering vehicle set up by Yorgen Fenech and targeted as a client by Keith Schembri and Konrad Mizzi’s Panama companies, I am writing a series of articles to try to explain in simple language, what may be happening in the backstage of this political opera.
Electrogas currently has as its shareholders, with equal shareholding (33.3%), the following:
- GEM Holdings, a company owned by Tumas Energy Limited (422 shares) a company within the Tumas Fenech Group of which Yorgen Fenech is a shareholder; Gasan Enterprises Limited (422 shares ), a company within the Gasan Group; New Energy Supply Limited (98 shares) which is entirely owned by Yorgen Fenech himself; and CP Holdings Limited (258 shares) which is a company owned equally by Paul Apap Bologna and his sister Christina Meli Bugeja.
- SIEMENS PROJECT VENTURES GMBH, registered in Germany.
- SOCAR Trading SA, a company registered in Switzerland. SOCAR is the State Oil Company of Azerbaijan with whom Electrogas has a 10 year deal for the purchase of gas at a fixed price up to April 2022, which price in 2017 was double the market price at the time.
The directors of this company are Gerhard Bennier, of Austrian Nationality representing SIEMENS, Yorgen Fenech representing GEM HOLDINGS and an individual of British Nationality representing SOCAR.
The company was registered with a Share Capital of €10,000 with the object of building a power station costing around €400 million. The financing was initially bridged through a Government guarantee of €360 million.
The directors’ report of Tumas Group Company Limited for 2017 states that ‘works are still in progress to close off negotiations with bankers to conclude a long-term internationally syndicated financing (a consortium of banks) which will go to re-finance current facilities. This is planned to be finalised during the last quarter of this year (2017)’.
As at today, we have no idea how the project is being financed as the accounts of Electrogas for 2016 and 2017 have not yet been filed with the MFSA. We’d be rather keen to read those.
On 15 October 2018, Electrogas filed with the MFSA, an extract of a unanimous shareholders’ resolution (which means a decision by all the shareholders) approving the increase of the authorised share capital from €10,000 to €1,000,000 (one million euro), but to leave the issued share capital at €10,000 for the present.
In doing so, the shareholders have agreed that in time, the share capital will be increased to one million.
Through the same resolution, the shareholders delegated the authority to issue and allot shares for the difference (€900,000), to the directors for a period of 5 years ending on 17 September 2022.
This is very unusual. The statute of the company follows the normal practice of imposing an extraordinary resolution with a high percentage majority to decide such a thing. In fact, this was set at 80.1 % which in effect means a unanimous decision as shareholders own a third each.
With this resolution, a simple majority, that is two of the three directors, have the right to agree between themselves on the way shares are distributed. Even, it appears, to bring in new outside shareholders.
Why does this resolution apply for 5 years? Is this perhaps related to the expiry of the deal with Socar fixing the price for gas? Or is this date set against a 2022 general election?
It is also pertinent to question why, whereas the increase in the authorised share capital was formalised in the revised statute, the new provision regarding the allotment of shares, was not updated in the official memorandum and articles filed with the MFSA, and the only document formalising this is the resolution.
Perhaps the company secretary or the Board can clarify the issues raised above for the benefit of the public.
More questions will follow.