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Malta Enterprise Officials Do Not Consider There To Have Been Fraud In Progress Press Affair, Court Hears

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Two Malta Enterprise officials told the court this morning that as far as they were concerned, there had been no fraud in a grant awarded to Progress Press for the purchase of printing equipment from Kasco Engineering. 

The grant is at the centre of a deal through which former OPM chief of staff Keith Schembri, along with former Allied Group managing director is believed to have defrauded both the company and the state investment agency. 

The compilation of evidence against Schembri and his associates continued today with the court hearing officials from Malta Enterprise testify about the grant applied for by Progress Press. The grant was intended to help finance the purchase of new printing press equipment. 

Malta Enterprise officials told the court that Progress Press had submitted a funding proposal that would see them invest €5.5 million in new equipment. 

Most of today’s testimony centred around the value of the investment proposed by Progress Press and whether it was eligible for funding by Malta Enterprise. 

Both officials told the court that cash grants could only be awarded to companies if the funding request related to the purchase of fixed assets. Consumables, they said, could not be covered by such grants. 

Lawyers Edward Gatt and Mark Vassallo for the accused repeatedly emphasised that the proposal submitted by Progress Press had clearly stated in its proposal to Malta Enterprise that consumables had been included in their estimate of the investment required for the project. 

They both questioned how one could say that fraud had taken place, when the company had clearly stated what it intended to use the money for, with no objections being raised by Malta Enterprise. 

George Francalanza, whose job it was to analyse the application and make a recommendation to the board, said that he did not think the consumables listed in the proposal would amount to such a high proportion of the envisaged cost. 

He also told the court that he did not think to question a line item in the proposal which refers to a number of “clicks” and which relates to the quantity of consumables used by the equipment. Asked whether he had made any effort to determine what this meant now that the case was known to be at the centre of a case of alleged fraud, Francalanza replied in the negative. 

He insisted that as far as he was concerned, whether or not consumables had been included in the proposal did not matter since the funds were only transferred to applicants once invoices and proof of payment were submitted to Malta Enterprise. 

At this stage, he said, the finance department would have informed the applicant that they could not cover the cost of consumables. 

Joseph Zammit, who testified after Francalanza, and who is responsible for the finance department, said that he was responsible for affecting the payment, adding that whether or not the amount being requested was eligible for payment was not his responsibility. 

Asked by the defence whether he believed the case constituted one of fraud, he said that “if the invoices are correct, then no, there was no fraud”.

The sitting was dominated by repeated arguments between the prosecution and the defence, with the former insisting that it had not been granted access to several documents that were essential to the case. 

The defence also suggested on a number of occasions that witnesses were not being asked to present all relevant information, including information that could help their clients’ case. 

A blow-by-blow account of proceedings can be found here

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