3 - 9 May 2001

Former director grills Maltacom chairman

by Ivan Brincat

A former Maltacom director took Maltacom plc chairman Maurice Zarb Adami to task yesterday morning during the group’s annual gen-eral meeting.
Mr Zammit Cutajar grilled Maltacom’s chairman asking him questions on his remuneration package, the company’s performance and the consultancies Maltacom outsourced last year.
What should have been question time turned into a war of words between Mr Zarb Adami and Mr Zammit Cutajar.
The latter began by asking three questions. The first centred around the company’s performance and whether the figures were worrying. He then asked how Mr Zarb Adami could justify receiving an income – as non-executive chairman – that was higher than that paid to the CEO. He then questioned the payment of thousands of liri on consultancy fees. These questions earned him a round of applause from those present.
Mr Zammit Cutajar said the rate of company growth was decreasing, the profits in 2000 increased by five per cent compared to 21 per cent the previous year and the value of shares had decreased by Lm100m. He asked if these figures were worrying.
CEO Stephen Muscat said the growth on turnover was affected by the introduction of VAT and this resulted in a decrease of Lm1.4m in turnover. It also reflected a decrease in the price of overseas calls.
Mr Muscat said that as from 1 December, tariffs for mobile calls had gone down and this also affected the company’s turnover.
Another reason for the lower results was the launch of Go Mobile in December, Mr Muscat said, adding that depreciation costs for Go had been calculated in December when the company has barely received any revenue.

Referring to Mr Zammit Cutajar’s question on remuneration, Mr Muscat clarified a section in the accounts which stated the company chairman had received Lm19,000 and Lm28,000 in another section.
Mr Muscat said the Board of Directors had unanimously decided to give the chairman an increase in salary for the period the company did not have a CEO – between 31 September 1999 and 7 April 2000.
Mr Zammit Cutajar asked what Mr Zarb Adami actually received as non-executive chairman, adding that he had called on Mr Zarb Adami to appoint a CEO for months.
In reply, Maltacom’s chairman said he received Lm12,000 as chairman of the Maltacom group, Lm6,000 as the chairman of the College of CEOs, and around Lm1,200 as chairman of the subsidiary companies.
Adding these figures, Mr Zammit Cutajar said Mr Zarb Adami was receiving a sum in the region of Lm30,000 which is more than the salary the full-time CEO was receiving.
With regards to the company’s value on the stock exchange, Mr Zarb Adami said when he was appointed chairman the share value was around Lm1.20 or Lm1.25. It reached a maximum level of Lm3.28 and has now gone down to around Lm1.90.
“It is still higher than I found it. Moreover, trends in technology shares worldwide have been similar and the performance of other companies on the stock exchange has been similar to ours,” Mr Zarb Adami said. Replying to the question on consultancy fees, Mr Zarb Adami said when he was appointed chairman he discovered the company had paid Lm2 million on consultancies. During this term this had been reduced to around Lm400,000 in 2000.
“If the shareholders agree I will publish the consultancies given out by Maltacom since it was founded.”
Mr Zammit Cutajar said he was only interested in those consultancies for the year 2000. Mr Zarb Adami said it was not in the commercial interest of the company to publish them, adding that any shareholder could ask the company secretary to see them.
In one of his questions Mr Zammit Cutajar had stated that he was forced to resign from the board of a Maltacom subsidiary company. Another shareholder wanted to know the reason why Mr Zammit Cutajar was forced to leave.
Mr Zarb Adami replied that Mr Zammit Cutajar’s appointment on the Maltacom board had expired but he was still a director of Go Mobile. However, Mr Zammit Cutajar did not agree that more directors should be appointed to the board at Go Mobile so he resigned. “The Board of Directors of Maltacom retains the right to appoint anyone to its boards,” Mr Zarb Adami said.
Mr Zammit Cutajar hit back saying he had resigned because the chairman of Maltacom wanted to appoint people on various boards so as to have full control.
“The chairman had come up with a proposal at Go Mobile but this was rejected by the directors of the company. When it came to a vote, the motion was voted against. He went back to the Maltacom board and appointed three directors to the board of Go Mobile. He then brought back the motion for approval and this time it was approved,” Mr Zammit Cutajar said.
The former director then told Mr Zarb Adami: “You can do whatever you want, not you really but the government, because effectively you can do nothing,” he said.
The annual report and financial statements were approved yesterday by the shareholders.
They approved a payment of a dividend of three cents after taxation at the rate of 30 per cent incurred by the company. The payment of the dividend is equivalent to the sum of Lm3,039,314 64 cents net of tax. This represents a gross payment of Lm4,341,878.
Moreover, the fourth resolution was the establishment of the maximum annual aggregate emoluments of directors at Lm150,000.
The company received three valid nominations from John Ellul Vincenti, Stephen Muscat and Charles Sacco. They were automatically appointed to the Board of Directors of Maltacom since there were no other nominations for the three vacancies.
Meanwhile the government, reconfirmed the appointment of Maurice Zarb Adami as chairman, John Camilleri as Deputy chairman and Ian Pellicano and Ing Philip Micallef as directors.
The Group ended the year 2000 with pre-tax profits up five per cent over the previous year at Lm13.5 million. Turnover for the group was up by 9.3 per cent to Lm48.1 million boosted by significant gains in revenue from line rental, mobile and international interconnection and internet and related data services.