Leo Brincat, Opposition spokesman for the environment, sustainable development and climate change, said yesterday that by his silence, Minister Tonio Fenech is again proving that instead of protecting the country’s financial interests and upholding transparency, he seems to be more interesting in protecting the interests of the former Head of his private secretariat, Alan Caruana.

Mr Brincat said that to date, neither Minister Fenech nor Minister Caruana himself nor even the private auditors who write the letter to Wasteserve and to the minister at the beginning of this year have accused Mr Caruana of lacking professional ethics and interfering in the performance of their duties. They did not deny the existence of the letter that was distributed to the media by the Labour Party three weeks ago either, he said.

The PL spokesman said that it is futile for Wasteserve to have issued a press release saying that at no point did it intend to place its independent auditors under pressure.

He said that the Opposition’s accusation was always against Mr Caruana who from Head of the Ministry’s Secretariat became Chairman of Malta Government Investments (MGI) and Chief Adviser to the Minister of Finance, meaning that he regularly frequents the very same ministry.

Mr Brincat went on to say that if the Ministry of Finance and MGI were happy with the original draft of Wasteserv accounts as audited by the private auditors, there must have been a reason why Mr Caruana called, as he apparently did, an urgent meeting in the Ministry of Finance during which the auditors were put under pressure.

Similarly, the auditors themselves must have had a reason for writing a letter as serious as the one they sent to  Minister Fenech and Wasteserv on January 4, 2012 in which they complained about the irresponsible behaviour of Mr Caruana, Mr Brincat added.

The PL spokesperson said that it is not the management letter that he based his earlier comments, but rather that he also quoted another management letter dated October 30, 2011 regarding the accounts for 2010.

He said that the fact that by early this year, the same private auditors were forced to complain about the pressure exerted on them by Mr Caruana confirms that they were right to complain to the parastatal company that “some complaints against Wasteserv were submitted to the company for the third consecutive year”.

Mr Brincat concluded by pointing out that the Minister of Finance has yet to comment on Mr Caruana’s involvement.

In response to this, the Ministry of Finance, the Economy and Investment said that it deplores the repeated attempts of Mr Brincat to create an issue where none exists. It said that Mr Brincat "has played the same record at least five times now hoping something will stick. Playing like a broken record does not make his statements correct".

The Ministry said that Government and its agencies have every right to discuss the issues emerging from an audit in its role of shareholder, including the audit methodology utilised. At no time during such discussions was any threat made or intended against this firm, not even in the most remote of manners. This point was emphasised in the letter sent by Wasteserv on January 6 to BDO. This was reaffirmed in the joint statement by both Wasteserv and BDO on July 24 as well as subsequent statements, it said. 

According to the Ministry, the Wasteserv audit was completed successfully, without audit qualification, by the same auditors. The Wasteserv financial statements were filed with the Company Registry of the MFSA on March 30 after the same auditors used alternative audit methods to complete the audit as recommended during the meetings alluded to/ It said that MGI and MIMCOL are responsible for overseeing the financial standing of Government owned companies, manage this responsibility very seriously, to the point of seeking external legal and accounting advice on the issues, apart from regular consultation with the companies themselves.

The Ministry went on to say that Wasteserv had reiterated in its reply to BDO Malta that there was no undue pressure to change an opinion, but rather seeking to identify the alternative auditing procedures that could have been performed in order to be able to complete the audit. It said that Mr Brincat chooses not to publish Wasteserv’s reply and subsequent exchanges with the auditors once the audit was successfully completed to the satisfaction of the Auditor, Wasteserv’s Board of Directors and the shareholder.

During the annual general meeting of Wasteserv, the directors and Government shareholder representatives from MGI and MIMCOL also resolved to reappoint the same auditors to office again, the Ministry said. All management issues pointed out by BDO have been the subject of multiple reviews and corrective action and improvement of procedures were instructed by the Wasteserv Board and subsequently implemented by management. MGI and MIMCOL have been involved through status checks to update Government. Through a strengthened senior management team and professional support the key issues identified have been subject to corrective action to management’s and the auditor’s satisfaction, hence the unqualified audited financial statements, it added.

"Nobody was waiting for Mr Brincat to ‘discover’ his storm in a teacup months after the unaudited financial statements were filed," the Ministry said.

The Ministry said it feels that Mr Brincat has acted unprofessionally in not verifying the facts with Wasteserv, the Ministry of Finance, the Economy and Investment, MGI, MIMCOL, or even the public documents held at the Company Registry of the MFSA, prior to making a press statement with unfounded allegations.

"This is therefore a clear case of repeated political bullying by Mr Brincat, whose intentions can only be less than honest in the face of the publicly available information and the stated facts of the case," the Ministry concluded.