Alternattiva’s Edward Fenech rehashes his baseless complaints about the privatisation of Maltacom at his hysterical and pointless press conference (Smarter than Austin, TMIS, 21 May).

During the privatisation process, the government sought professional advice from Lehman Brothers who were asked to evaluate the offers for the Maltacom shares against the value of the Maltacom shares in the Stock Exchange at the time the offers were made. The advice given by Lehman Brothers stated that the market value of the shares are not a real reflection of the company’s fundamental prospects and that the Tecom offer was very close to realistic expectations for the government shares.

Now Edward Fenech is to tell us if he thinks he is “Smarter than Lehmans”. It will earn him quite a reputation in global financial circles, given that his effort to earn a reputation in local political circles has proved fruitless.

There is nothing wrong with seeking a second opinion and – as reported in other sections of the press – the government is informed that Maltacom itself (the old Board of Directors) did so, asking their specially appointed financial advisers – Rothschild – to assess the e220 million price tag fetched for the 60 per cent shareholding in Maltacom. The government is informed that Rothschild’s opinion was very similar to that of Lehmans’ and concluded that the EBITDA trading multiple proposed was in line with the norm of the telecom industry at this point in time. Moreover, Rothschild also argues that Maltacom, in view of its size, should indeed trade as a discount when compared to the telecom industry norm. Does Edward Fenech wish that he is also “Smarter than Rothschild”?

No harm in seeking the opinions of world-renowned firms but even the most basic reading of the shifts and patterns at the Stock Exchange can confirm that the value of the company and the quoted price at the Exchange are unrelated.

The accompanying chart shows the shift in the value of the stock on the exchange. As soon as government definitively announced its decision to sell its shares, speculation pushed the price up beyond any realistic figure. Before November 2005, the price of the stock was, for most of the time, actually lower than the price the 60 per cent shareholding was ultimately sold for.

Does Edward Fenech need to be smarter than either Lehman Brothers or Rothschild to realise this?

While he’s at it he may want to claim he is “Smarter than Analysys”, which advised on the strategic grounds to select a partner in Maltacom and “Smarter than Gartner”, which ranked and assessed the technical competence of the bidders. All three sets of advisers – financial, strategic and technical – were unanimous in their advice to the government.

The strategic element is especially relevant because it gives Maltacom a viable future to look forward to. It will transfer the technology of tomorrow to a company operating today with the vision to transform it into the leading quad-play operator in the Mediterranean region. This is way beyond what Alternattiva’s club members seem to be willing or able to see. But now it is less than four years away.

The libertarian attitude of Edward Fenech – who renounces even a hint of social conscience his party is supposed to be rather committed to – is only interested in price and ignores the remaining benefits of this deal.

This is where his scepticism about job security for employees fits in. The government ensured that no one is made redundant as a result of privatisation and three years is a longer guarantee than anyone in the private sector can ever hope to be given. It is certainly all the GWU asked for because they know more than anyone else, and certainly more than Edward Fenech, that this guarantee was not there before privatisation. Three years from now Maltacom will be a bigger, even more successful company than it is today. That ultimately will be the most important guarantee to the employees’ job prospects.

Alternattiva’s new-found extreme-right libertarian economic policy is also the reason why Edward Fenech ignores the renewed commitments of the new privately-owned Maltacom to finance a greater use of the Telecare services, to subsidise services used by the elderly and persons with disability and to support the participation of young people in ICT entrepreneurship programmes to help them move out in the economic reality of today.

Jesmond Saliba

Communications Coordinator to Minister

Ministry for Investment, Industry and Information Technology