Sea Malta chairman Marlene Mizzi tendered her resignation as chairman of the national shipping line yesterday, saying that she could no longer represent a shareholder which had disregarded the company’s financial problems over the years and had ignored all efforts to save it.

In her four-page resignation letter, addressed to Prime Minister Lawrence Gonzi, Mrs Mizzi gave the reasons behind her resignation and took the opportunity to criticise the government, as the company’s main shareholder, for abdicating its responsibilities and control over the company which, she said, was of strategic importance to Malta.

Mrs Mizzi has held the post of chairman of the national shipping line since April 1997. She said she had given much thought to her resignation which she had not tendered before due to the respect she has for the company’s employees who, she said, looked to her for guidance and direction. Mrs Mizzi said she had also remained in her post to provide “a counter-balance to the determination to dismantle our national shipping line – an entity that many believe is of strategic importance to this island”.

Mrs Mizzi said: “I can no longer represent a shareholder who has disregarded Sea Malta’s financial requirements, who has ignored all constructive efforts to save Sea Malta and who is abdicating its responsibilities and control over a company of strategic importance. This goes against my principles and good sense both as the chairman of this company and as a citizen of this State.”

Mrs Mizzi said that since 1997, there had been several communiqués with the shareholders, informing them of the “grave problems facing the company” and highlighting the commercial, financial and legal consequences, should these problems not be addressed. She said several reports were drawn up, indicating possible solutions to these problems, which would have ensured that the jobs of the company’s employees were safeguarded and also ensured the reliability of the service being provided.

In June 2001, Mrs Mizzi explained, during a meeting at Castille, the then Prime Minister Eddie Fenech Adami instructed ministers Josef Bonnici and John Dalli to address the company’s financial problems. She said this instruction was given in view of Sea Malta’s strategic value to Malta.

She said that although “nothing was effectively done in this regard”, both ministers were supportive of the company’s problems resulting from under-capitalisation. However, when the company fell under Minister Austin Gatt’s portfolio, it was a different story because “it was immediately evident that Sea Malta had no future”.

Mrs Mizzi went on to explain that during a meeting in May 2003, Dr Gatt had informed the company that “the capital injection requested from government was actually turned down ‘some four years ago’ and was never meant to be”. This statement, she said, had come as a surprise, and indicated that “the board and the company had been misled by the very shareholders they represent.

“Notwithstanding this major hitch, I have continued to do my utmost for the company, for which I was responsible, with the result that no jobs were lost and with financial results showing profitable operations. This has only been achieved by leading the company in a ‘business as usual’ manner, exercising strict control on expenditure, reducing administration costs by five to six per cent per annum and retaining the lions’ share of the market – in spite of the bleak prospects presented by (the) shareholders,” she said.

Mrs Mizzi added that none of these achievements had been acknowledged by the government, which continued to push the idea and final aim of disposing of or dismantling the company, with the only justification given being that Sea Malta was a “loss-making company”.

“Minister Gatt’s speech in the House of Representative on 29 April 2004 gave a misleading picture of Sea Malta, which may have distorted any valid arguments for or against its sale. Subsequent other references to Sea Malta in the media, including recent interviews and statements from the ministry, have done nothing but portray the company as an inefficient and useless company, which is a great burden on the taxpayer. This wrong and misleading information meant to justify the disposal of the company has caused real damage to the company’s commercial activities as well as to its image. Furthermore, the responsibility of making such statements on the company during negotiations currently undergoing with a potential buyer is highly questionable,” Mrs Mizzi added.

She said that at no point did the government ever request possible solutions to the company’s problems, adding that Dr Gatt’s recent statement that, should privatisation fail, he would close the company down “left no doubt as to the government’s ultimate scope and of the sad fact that the future of this company is doomed”.

She said this damaging revelation of government’s strategy was made public with complete disregard for the company’s commercial interests, responsible negotiating skills and the sentiments of the company’s employees, as well as the professional capabilities of the company directors.

Mrs Mizzi went to explain that a restructuring report drawn up by the company in July 2004 gave possible solutions to the problems being faced and showed that, with the right measures, a turnaround to a profitable situation could have been achieved. The management accounts, which she said she forwarded to the Prime Minister regularly, substantiate the data of this report, she said, adding that notwithstanding all this, she had received no feedback at all. This report was eventually forwarded to MIMCOL in December 2004, who also chose to ignore it, she said.

The former chairman said that Sea Malta was only funded once – on its inception more than 30 years ago – when a capital investment of Lm3.2 million was made, of which Lm2.6 million was paid back to its shareholders.

“During these years, Sea Malta has invested more than Lm18 million of its own funds in capital investments as well as investments in its human recourses. Masters and officers from Sea Malta now staff entities like the Malta Maritime Authority, the Freeport, Gozo Channel and Tug Malta. This has been a company, which has shouldered the burden of its social obligations to the nation at the cost of negative financial results, while operating in a totally liberalised and difficult market. Yet it is spoken about as a useless, inefficient entity, worthy only of disposal.”

She said that notwithstanding the “total lack of support – financial and otherwise – by the government and other shareholders”, the company and its staff still managed to provide an “impeccably reliable service to this nation and its industry, retain and increase our market share, as well as preserve and invest in our human capital.”

“With all due respect, I would like to state that this decision to dispose of the only shipping line belonging to this Island State – after the government has effectively abdicated its responsibilities to the company for all these years – is foolish and short-sighted. Malta will now become just another port of call for the new owners and we shall only know too late what the consequences of handing over of one of Malta’s strategic activities to a foreign shipper are, on the economy, on Malta’s competitiveness and on industry,” she said.

In conclusion, she said she could no longer represent a shareholder which had ignored efforts to save Sea Malta, which is of strategic importance to the country and its economy.

PM accepts resignation

In a letter sent to Mrs Mizzi late last night, Prime Minister Lawrence Gonzi said he was accepting her resignation as chairman of Sea Malta.

In his five-page letter, Dr Gonzi expressed his disappointment at some of the remarks she made in her resignation letter and also at the fact that it came right in the middle of the final round of discussions with the potential investor. He said the resignation is underpinned by the decisions taken by the government not to use taxpayers’ money to subsidise the company’s losses and to privatise it.

Dr Gonzi agreed with Mrs Mizzi that since she did not agree with her shareholders’ strategies and policies for the company she was leading, her position as the shareholders’ representative had become untenable. While saying that he had no doubt of her good will, he said he expected her to “look beyond the narrow view of an organisation with its own instinct to survive and at the bigger picture of the national interest”.

The Prime Minister said he agreed that it was strategically important for Malta to have a constant maritime link with mainland Europe but this, he said, needed to be reliable, predictable and affordable. He said that government will continue to ensure that this link continues to exist and is maintained.

“This is and has been a matter of policy of this government for several years. It has been communicated to you in explicit terms by myself and by my minister responsible for your company. Over time you have refused to understand our policy, not to mention to comply with it. Instead, you have acted in such a way as to make it inevitable for the government to have to defend its policy at this delicate time of negotiating the company’s sale,” he said.

Dr Gonzi disagreed with Mrs Mizzi’s claims that the government has not invested in Sea Malta since its inception. “The company has continued to exist only thanks to the guarantees provided by government,” he said.

He said that despite her efforts, the company had made a pre-tax loss of Lm3.6 million since she took over as chairman. He continued by saying that Mrs Mizzi’s accusations directed at the officials acting on the government’s behalf to seek the national interest in this privatisation process come from “blatant misinformation and gross unfairness which I would have hoped you would have been able to avoid”.