The Ministry of Investment and Information Technology has never responded to any of the Greens’ criticism made on any its actions or policies. Until last Tuesday evening of course, when after a press conference held by Alternattiva Demokratika, in which we criticised the sale of government shareholding at a 20 per cent discount on the last quoted price (equivalent to Lm25 million), the minister’s spin doctors were putting in some serious overtime. We had obviously hit where it hurt, while Labour was left pondering its strategic actions on ‘big issues’ like the increase of 1c on the price of the Maltese hobza. They only reacted the day after we had voiced our criticism, using much of our points to hit home.

The story is such. On Monday morning Austin Gatt announced that the sale of government’s remaining 60 per cent holding in Maltacom would be finalised on Wednesday, just 48 hours later. I decided to take a closer look at what government had just announced. The more I searched, the more it became obvious that, although the idea of privatisation itself was smart, the terms of the deal were not. What was more revealing was the immediate knee-jerk reaction of the Ministry to our criticism – the Greens had adopted “an amateurish stance and were damaging Maltacom’s investment,” they declared. I guess that while government and opposition are accustomed to our criticism on the never-ending list of environmental atrocities in Malta (which we will never cease to do), they are never prepared for our criticism on economic and finance matters. They simply go berserk and start hurling insults and accusations. Let us take a closer look at the deal and the subsequent spin.

On Friday 12 May, the last day before full privatisation was announced, the shares of Maltacom closed at Lm1.95. In every other sane economy, this is accepted as the market price. It is, after all, the market logic on which the Nationalists, and now a very willing Labour Party, long ago decided to run the country. This time however, the market price was of “no relevance” (ministerial quote) to the sale of Maltacom shares, because (again) in the man’s own words, “our stock exchange does not consider the fundamentals”. When you remove the business school speak from the ministerial pronouncement, what Minister Gatt in effect was declaring is that our stock exchange is one big speculative gamble that bears “no relevance” to economic reality i.e. local investors and their financial advisers simply don’t care about the real financial performance of listed companies. I could not believe the arrogance. Minister Gatt is now not only smarter than those sitting on the government and opposition benches, as well as the ignorant public out there, he is now cleverer than the whole stock market! Austin is now wiser than the collective investing public. Coming from a senior government minister such words are dangerous and irresponsible. What is he proposing? A devaluation of the market capitalization of locally quoted shares? Shall we rely on his market intuition from now on? Are we going to have Alfred Sant devalue our currency and Austin Gatt discount our stock exchange?

As soon as Minister Gatt flushed the market price down his political toilet, he declared that the price agreed with Tecom (a company about which the Greens have absolutely no doubts) was Euro 220 million. When a journalist asked him what the equivalent price per share was, he answered “one fifty five... four.” (Lm1.55,4) It is amazing that Dr Gatt chose to remember the last four mils, while ignoring the 40 cents knocked off from each share. Why question him? He knows it all, doesn’t he? Oh I forgot! It was his investment advisers “of world fame” that told him. Aren’t these the same investment advisers who in late 2004, for example, paid a $222.5 million settlement to the University of California, after the latter had to write-off of an equivalent investment made in a company called ENRON? Using his advisers as a front and as some sort of biblical higher authority is simply political obscurantism. They have no claim to infallibility.

The only thing the Greens are questioning is why the government concluded a sale for Lm25 million less than the last quoted price. Every honest stockbroker in this country and every undergrad in business studies will tell you that when you sell a controlling interest in a company you normally ask for a premium. Only a fool would give a discount! After realising that the argument about the madness of the logic of the local stock market was a big mistake, Dr Gatt went about telling us why Maltacom was sold at such a price. There were other reasons of course! I see, so after all he does agree that there was an element of price discounting, “due to certain obligations” the ministry declared. The first of these obligations, and pitch your ears carefully now, is that Maltacom has social obligations that Tecom has agreed to carry. Fine, but these social obligations are existing ones. They aren’t new ones. Surely this fact was already reflected in the stock price on Friday 12 May. Why should Tecom be given a discount on the market price, when such social obligations have been carried by a quoted Maltacom for over a decade?

Oh I forgot! There was another reason why Minister Gatt thought it fit to pitch the selling price so much lower than market price. Of course, there are the excess employees – the political scapegoats of last resort! It is amazing how Austin Gatt can talk as if his party has just come off the opposition benches. Who is responsible for the “excess” employees if not his party which has been in power for almost two decades? The issue of excess employees is even more scandalous when one factors in that during the last eight years Maltacom started off as a very successful mobile phone operator and an equally successful Internet service provider. Why weren’t Austin’s excessive employees engaged in these new enterprises? Who are these “excess” people anyway? Can we have a list of their names and addresses? Silly me! We will only know in three years’ time when Tecom’s contractual obligation to the employees will vanish into the thinnest of airs. The election will of course be over by then.

As for the supposed need of finding a “strategic partner” I can wholeheartedly agree with Minister Gatt. Malta is indeed a unique strategic partner. HSBC will even vouch for it. The ultimate in political spin was shown in the title of the ministry’s official rebuttal. They insinuated that AD was damaging all the shareholders. The minister flatters us. Is our opinion on the matter so well heeded? Excuse me, dear Minister, but the largest shareholder is after all the government of Malta, and the only person who cost this shareholder Lm25 million is the person who closed the deal. As for the other shareholders, how could AD damage them. Aren’t they all speculative, reckless twats who foolishly believe that their shares are worth Lm1.95? Or aren’t they, after all?

I could go on forever, but it’s Sunday and I’m sure you are dying to go out and enjoy the weather. I am, after all, crying over split milk, because the deal has been done, the shares at Lm1.55 (and four mils) have been sold. What’s a Lm25 million discount after all compared to a national debt of over one and a half billion? My sincere congratulations go to Tecom of Dubai. In my opinion they have done a better deal than that made by HSBC in 1998. No small wonder that they will call their other business venture SmartCity!

Edward P. Fenech is spokesperson on finance, the economy and tourism of Alternattiva Demokratika – The Green Party