Since the government announced last Sunday, through information selectively leaked to one media outlet, that it has turned down the Russian-backed proposal for a shooting range in Mosta near the Mount St Joseph retreat, it has failed to respond to this newspaper’s repeated questions concerning what aspect of the due diligence process the investors actually failed.
Last Sunday it was reported that U-Group had failed the government’s due diligence process and that the controversial project would not proceed because of “financial considerations”.
While it is probable that that ‘financial considerations’ are behind the government’s rejection of the project, when it comes to such due diligence exercises, the question is not only about how much money the candidate has in its bank accounts, but also where the money has come from and who is actually behind that money.
In such exercises, the possibilities of money-laundering, politically-exposed people and the use of the proceeds of crime are also factored in to a great extent – and all are potential deal-breakers.
The government has, however, been decidedly vague about its reasons for rejecting the U-Group’s application for a shooting range in Busbesija, Mosta, which has been fraught with controversy since this newspaper broke the story back in April.
Apart from the information selectively leaked to another section of the media, all it has said was that: “The government has decided to not continue negotiations with the initial preferred bidder, U-Group Malta Ltd”, and that it would begin negotiations with the second preferred bidder, which aims to develop a retreat house with agritourism facilities.
Whether the government’s breaking-off of discussions with U-Group was due to the over-riding public pressure against the shooting range project, or whether – and if so, in which way – the company had actually failed the government’s due diligence exercise is anyone’s guess as repeated questions to the government on the matter have gone unanswered.
From the look of it, U-Group itself appears to be similarly perplexed. On Sunday, in the wake of that morning’s newspaper report, the Russian-backed company stated: “U-Group Malta Ltd was not informed by the government of any decision. U-Group Malta Ltd is surprised by the statements on the media as U Group Malta Ltd was never informed of issues that are being reported. It was never asked [for] any clarifications on its submissions by any government representative in the lines reported in the media.
“U-Group Malta Ltd would be very surprised if any decisions or issues were communicated to the media by the Government of Malta but not to the investors.”
On Wednesday, U-Group added that it had just received a scanned copy of a letter from the Government Property Department, simply stating that is has been decided “that negotiations are not to continue any further”.
U-Group added: “The communication received does not make reference to the grounds which have led to such decision. In this light, U-Group Malta Ltd has requested a meeting with the aforementioned department for clarifications.”