Mr Cassar was testifying in the compilation of evidence against Mr Zahra, 50, from Marsascala, who is being accused of falsely giving the impression of incriminating evidence, making false accusations against third persons, filing a false report, and circulating unfounded, alarming rumours.

At the end of yesterday’s sitting, which was the first in these proceedings, presiding magistrate Giovanni Grixti ruled sufficient prima facie evidence had been presented for the man to be indicted.

Mr Cassar took the stand

yesterday to tell the court all he knew about the case. He explained that on 15 July Prime Minister Lawrence Gonzi approached the police to investigate allegations made in a report by Joseph Zahra.

Mr Zahra had been hired by Sietse Zoodsma, Simed’s vice-president, to conduct an investigation on the way the Mater Dei Hospital equipment tender was awarded. Dr Joseph Fenech, Simed’s legal representative in Malta, who passed Mr Zahra’s report on to Dr Gonzi, had told police the Dutch company “found it strange that a Lm30m tender was given for all the equipment of the hospital – for everything from brooms to sophisticated machinery.”

Simed is a Dutch company that was chosen as the preferred bidder for the equipment tender of the Mater Dei Hospital, but in the final stages of the process, the tender was awarded to Inso, an Italian consortium, represented in Malta by Professor Ian Refalo.

The report, drawn up by the accused and eventually passed on to Dr Gonzi, implicated three people in the suspected corruption: Contracts Department Director Joseph Spiteri, his daughter Claudine Cassar and former minister John Dalli’s brother Bastjan, Mr Cassar said. In the report, drawn up as part of the investigation for Simed, Mr Zahra listed a number of meetings Ms Cassar, Mr Spiteri and Mr Dalli allegedly had with Inso director of operations Marco Fontanelli and other officials in Naples and Florence.

The report also mentioned phone calls made by these three people and Mr Zahra claimed he had heard the recordings of these phone calls through his contacts in the Italian Secret Service.

In court yesterday, Mr Cassar said that E2.3 million were transferred by a swift transaction on 30 December 2003 from a Verona bank to one in London.

The investigation of the accused started on 19 July and during his testimony Mr Cassar explained that initially, Mr Zahra was being interviewed as a possible police witness. According to the assistant police commissioner, Mr Zoodsma demanded that Mr Zahra provide him with hard evidence of the suspected corruption.

The accused allegedly told the Simed vice-president that his contacts were asking for Lm9,000 to hand over the information. The price was eventually raised to Lm1 million and Mr Zahra told him he could go to the police for information.

During the cross-examination of Mr Cassar, defence attorney Dr Joseph Giglio said Mr Zahra raised the price to urge the company to give up because he did not want to uncover his sources. In response, Mr Cassar said the accused’s actions were fuelled by the fact that he had no sources to uncover and was therefore hoping Simed would not continue pressuring him for information. Mr Cassar also told the court that if enough evidence was provided for the equipment tender to be transferred to Simed, the company promised Mr Zahra three per cent of the tender. At this point Mr Zahra insisted he had no evidence in hand.

During questioning, Mr Zahra was being evasive and claimed he would not give the police names of his informers, said Mr Cassar. After this, the assistant commissioner said the accused told him the report he presented to Simed was fabricated.

When asked why he had made such serious allegations against Mr Spiteri, Ms Cassar and Mr Dalli, Mr Cassar said the accused told him it was because of Mr Zoodsma’s insistence. “He would not take no for an answer,” Mr Zahra allegedly told Mr Cassar.

The witness added Mr Zahra told him he did not know the allegedly fabricated information would be leaked to such high officials, referring to the prime minister.

When the police spoke to

Ms Cassar, who is Alert Communications managing director, she said she did not know Mr Dalli personally. Mr Cassar said checks on Ms Cassar’s travel records show she was not in Italy on the dates mentioned in the report.

When spoken to, Bastjan Dalli said he was not involved in the Mater Dei Hospital equipment tender since he works in construction. Mr Cassar said Mr Dalli claimed not to know Ms Cassar or the Italian people mentioned in Mr Zahra’s report.

On a request by the defence, presiding magistrate Giovanni Grixti ordered reports on the case against Mr Zahra were to be limited to what is said in court. Dr Giglio said articles that have been published in some sections of the media referring to the case and Mr Zahra’s work in general could seriously jeopardise his right to a fair trial. “It is a preventative measure in case Mr Zahra is tried by the criminal court. Articles making unfounded allegations can prejudice the man’s hearing,” said the defence attorney.

Magistrate Grixti upheld the defence’s request and said, “although the court will not judge what has been published, it now orders journalists to report only what is said in the courtroom.”

Simed’s legal representative in Malta Joseph Fenech and prosecuting inspector Joseph Abdilla also testified at yesterday’s sitting.

At the end of the hearing, Magistrate Grixti ruled sufficient evidence had been presented for a bill of indictment to be drawn up against Mr Zahra.