It is regrettable that recent Maltese history is literally not written. Sure, there are exceptions now and then such as Matthew Vella’s recent history book on the Maltese crime syndicates of London, but most of the time there is astonishing and screaming silence. The immense volume of documents that yet have to be researched under a methodological framework to shed light on our recent history and many important themes and subjects is immense and has yet to be rigorously studied: case in point is the history of Tumas Group. By unraveling the history of Tumas Group, we would inevitably be able to understand further Maltese history.
Tumas Group is one of Malta’s biggest local companies to date having grown an empire with an official and registered net equity of €293 million and total assets of €454 million of which as much as three-quarters of it consists of property. Its average revenue from 2010 to 2020 was around €107 million every year with an average net profit of €13 million. The group has a 100% shareholding in a total of 25 companies and makes consistent profits year on year although it has been making slightly more in the second half of the decade. It’s public stock traded in the local stock exchange as Suntams Shareholdings ranks as the 30th biggest stock by market capitalisation with a total market cap of €10.6 million.
Undoubtedly, Tumas Group’s most popular brand is Portomaso which is basically a sprawling complex of a hotel, luxury apartments, restaurants and a casino in a public strip of land in Paceville, Spinola. Under Joseph Muscat’s Labour administration, Tumas Group has also become Malta’s major energy provider having been the company that spearheaded a consortium of companies to form Electrogas. Electrogas owns the gas-fired power station in Delimara and was the subject of Daphne Caruana Galizia’s investigations that eventually lead to her murder.
Tumas Group has been under the spotlight ever since the 17 Black revelations of 2017 but became a case of serious criminal and historical study ever since the political crisis of November 2019. Yorgen Fenech who is today being accused of masterminding the murder of Daphne Caruana Galizia was the family’s trusted captain to steward the family’s empire built by his grandfather Tumas. By himself, today, Yorgen Fenech carries the burden of shaming and tarnishing the family’s image as a reputable business organisation. The family’s bad apple and an exception to the rule. However, that’s the easiest and most convenient narrative for the family.
History shows a very different narrative from what popular hagiographies have done so far. In fact, the biggest question about Tumas Fenech has always been, how did he make his money? Or rather, from where did Tumas Fenech get his money? I have answers to these questions and there is also documented evidence that back my answers. My history here is brief and limited but it is enough to provide a very clear outline for future work and my results are very consistent with my overall narrative of the Rent-Seeker’s Paradise. Tumas Group is a business empire created by the backing and support of the state with constant rent-seeking activities throughout all its major business deals and expansions. The history of Tumas Fenech is not a history of a commercial or a financial genius, but rather a textbook example of how local businesses grew by constant rent-seeking activities with the enabling and the backing of the state.
This is a fascinating history that spans thousands of documents, hundreds of deals, many companies, and also lots of politics. A history of Tumas Fenech and his business empire would shed immense light on Maltese recent history. It is a huge task that I would be happy to go through slowly at my own pace. Help would be appreciated as well because it’s not a task for a single person unless it’s a full-time task. There are literally thousands of documents to go through. However, it is definitely worth doing. What I have done so far is also thanks to the contributions which I received last February for this project. I’ve received €3,300 in donations for this project and spent around €2,300 so far.
1) The origins
The origins of Tumas Group lie in the first company opened by Tumas Fenech and his sons called “Easysell” in 1973. The company’s share capital was registered at the considerable sum of M30,000 which were a lot of money back then and also highly suspicious given the humble origins of the company. The company owned a humble showroom in Qormi which would have hardy fetched a couple of thousand Maltese Liri. The aim of the company was to import and sell furniture and household items.
The first notarial deed of the company is a very interesting document: it’s an overdraft facility with an undisclosed interest rate from Bank of Valletta for LM25,000 and a general hypothec on the company. This was a considerable amount of money and also striking for a company that had just been founded. The company then proceed to make use of the bank’s overdraft facility to purchase property and leases becoming a speculator in the property market. Just like that, Tumas had become a property speculator with substantial bank credit provided rather quickly and gradually kept taking more credit from the bank to speculate in the property market and accumulate properties. Throughout the 1970s, Tumas Fenech made various property deals with distinguished individuals including with people in the judiciary.
2) Political support
Bank of Valletta was Malta’s newest socialist creation after having been nationalised and its name changed from the previous National Bank of Malta. Tumas Fenech was a friend and supporter of young politician Lino Spiteri who then went on to become the deputy head of the Central Bank from 1974 to 1981 and later Minister of Trade and Economic Planning from 1983-87. However, over the years Tumas Fenech built a strong friendship with Dom Mintoff whom he used to invite for trips on his yacht and even trips abroad.
Lino Spiteri’s close friendship with Tumas Fenech came back to haunt him later on in his life. Lino Spiteri was touted to become the leader of the Labour Party after Karmenu Mifsud Bonnici. During the Labour leadership race of 1992, Lino Spiteri won the first round of votes and went on for a final vote against Alfred Sant, after eliminating the other candidate. Prior to the runoff vote, Evarist Bartolo who back then was supporting Alfred Sant’s leadership bid, penned an anonymous letter and sent it to all Labour delegates. The letter accused Lino Spiteri of corruption and of having ties that were too close with Tumas Fenech. Lino Spiteri went on to lose the second round and Alfred Sant was elected leader of the Labour Party.
3) The pivot into hotels
In the 1980s, Tums Fenech begins acquiring hotels and builds a guesthouse in Buġibba, buys the Dolmen Hotel and later also the Topaz. In 1986 Tumas Fenech buys the Spinola Development Company for LM120,000. The Spinola Development Company had owned a public lease for a public strip of land where it built a hotel under the Hilton brand. By owning the company, Tumas Fenech also owned the government lease.
4) The background to the Hilton
The Hilton was brought to Malta by a group of British and US citizens who formed the Spinola Development Company in 1963 specifically to obtain the public lease to build a hotel. The lease was for 150 years and some of the major investors in the project weren’t even involved in the tourism industry, such as Toddie Lee Wynne Jr. who represented American Liberty Oil Company which was invested in the project. The lease for the public land was for LM990 every year. It was just one of the many land deals that the Nationalist government of the 1960s made under its Aids to Industries Ordinance with the aim to create local industries by giving them direct aid, tax incentives, and land to mount their enterprises. A Maltese company that benefitted substantially from this aid was Corinthia Group. A brief history of land giveaways was written by James Debono and can be found here.
Portomaso is the cash cow of Tumas Group and was made possible with the backing of the major political parties. When in government in the 1990s, the Nationalists extended Tumas Group’s lease of the land in Spinola until 2114 but retained the same payment of LM990 every year. Changes to the conditions of the deed were made in 1991 to allow the company to use the land for speculative purposes other than strictly for tourism and eventually the company bought the government’s lease outright in 2006 for a meager LM800,000.
Tumas Group became involved in the energy sector under Joseph Muscat’s Labour government and under the company’s stewardship of Yorgen Fenech, the grandson of Tumas and the son of George Fenech. Tumas Group’s involvement in the energy sector was corrupt from the start and made with the direct intention to siphon money from the state. Electrogas Malta is a consortium composed of Siemens Project Ventures GmbH, Socar Trading SA, and GEM holding Limited. GEM is owned by Michael Apap Bologna, The Gasan Group and Tumas Group.
Electrogas was backed by an indefinite government guarantee which would have forced the government to cover Electrogas’ losses in case it failed to make a profit. The Electrogas project was a hive for kickbacks and corruption which Daphne Caruana Galizia was uncovering gradually before she was murdered on October 16th, 2017.
The history of Tumas Group is not a history of commercial genius at all, but more of a history of rent-seeking and how political support across both major political parties abetted and enabled the growth of a local business. Tumas Group donated to politicians and political parties across the board and did not shy away from making cross-political alliances. Its excessive influence and growth brought by irregular means and public resources gave Tumas Fenech and the group a sense of impunity and a sense of outreach with limitless potential. Yorgen Fenech was possible because he grew up in such an environment and isn’t distinguishable from them. All of Yorgen Fenech’s personal and business characteristics can be traced down to the family as they were executed in the past in different ways and manners. Yorgen Fenech was the family’s excess and not its exception.
PS: This research is just the beginning. I still have to make further plans for financing the development of this but I am not in a rush. There are thousands of documents to look at, and thousands of other documents which I still need to obtain. The process is slow and painful.