An Investigation of Government’s Expropriation of Two One-Fourth Undivided Shares of the Property at 36 Old Mint Street, Valletta

On 5 June 2015, the three Opposition Members of Parliament on the Public Accounts Committee  requested the Auditor General to review Government’s expropriation of two one-fourth undivided shares of the property at 36 Old Mint Street, Valletta from Mark Gaffarena. 

In its review of these expropriations, the National Audit Office (NAO) established that the standards expected in terms of good governance were lacking. The prompt action taken by the Government Property Department (GPD) in advocating the expropriations instigated by Gaffarena, without any discussion or analysis, was deemed incomprehensible by the NAO. The public purpose served by the expropriation of two one-fourth undivided shares of 36 Old Mint Street was far from clear. This must be seen in a context where it was within Government’s control to expropriate the entire property. This Office concluded that the Parliamentary Secretary (PS OPM), Director General (DG) GPD and Director Estate Management (DEM) failed to safeguard Government’s interest by expropriating property that, although useful, served no identified public purpose. When one considers the inflated valuation of 36 Old Mint Street, the undervaluation of Government land disposed of, as well as the substantial cash payments made, over and above the vague public purpose, the NAO deems these expropriations as not constituting value for money.

The NAO has unequivocally established that Gaffarena was aware of Government’s intention to expropriate well in advance of the publication of the President’s declaration. The NAO is of the opinion that this information was confidential as it was sensitive government-related information that only Gaffarena was privy to. This put Gaffarena at an unfair advantage over the other co-owners as he could anticipate Government’s intention to expropriate the remaining undivided shares in advance of this becoming public knowledge. In fact, Gaffarena did exploit this information when he entered into two promise of sale agreements in advance of the publication of Government’s expropriation.

The NAO notes that if the Attorney General’s advice to the Internal Audit and Investigations Department is applied, then the deeds with Gaffarena may be invalid, as compensation payable by Government for the undivided shares expropriated should have been proportionally paid to all co-owners.