AMATEURISHNESS AND GREED IN THE LAND OF “U IVA”

by TBA

On August 1, 2023, the Times of Malta announced that “a €25 million, 10-year bond [was] issued by the Water Services Corporation” (WSC). We investigated this claim and found that the Water Services Corporation did not issue the bond. Hence the Times’ claim is FALSE. Financial expertise remains the Achilles heel at the Times.

Clearflowplus

The bond was issued instead by Clearflowplus, a public liability company which has an authorised and issued share capital of a quarter million Euros. Although Clearflowplus is a subsidiary of WSC, the differences between the two companies are critical for legal and financial purposes. For example, the proceeds of the bond issue will not go to WSC but will remain in the hands of Clearflowplus which will then pass on the money for approved projects and against proof of compliance. Another example concerns Clearflowplus’ commitment to restrict its bond proceeds for green energy projects only. WSC is up to its eyeballs in debt with HSBC, incurring well over 5% interest on the massive loan. Yet, Clearflowplus can’t release the proceeds, which pay 4.25% to the bondholders, to pay off the HSBC loan even though it would be economically advantageous for WSC to do so. The bond proceeds may only be released for green projects. Incidentally, while the HSBC loan is guaranteed to be repaid by the Government of Malta, the same Government doesn’t guarantee the repayment of the €25 million bond issuance.

Unlike Clearflowplus, WSC has no share capital. Instead, it’s constituted by law under Cap. 355 of the Laws of Malta. Miriam Dalli, the minister responsible for water, designates the members of the Board of Directors.

Clearflowplus has claimed in its registration document for the bonds that half of its directors are “independent directors since they are free of any significant business, family or OTHER RELATIONSHIP with the [company], its controlling shareholders or the management… that could create a conflict of interest such as to impair their judgement” (our capital letters for emphasis). This claim parrots Rule 5.119 of the Capital Markets Rules.

“Other relationships” under the law is broad enough to include political relationships. The so called “independent directors” at Clearflowplus are “tagħna lkoll” selected for their ardent Labour support. They are not intellectuals of independent thought. Many ministers stick their wives and girlfriends on various public boards’ directorships. They violate the legal boundaries mandated under the “other relationships” clause.

Miriam Dalli pulls the strings all the way down to Clearflowplus. One “independent director” is Katrina Cuschieri who at the tender age of 23, before she graduated, was already appointed by Dalli for another job, as consultant to the same minister for a whopping €50,000 annually. The girl, still “b’żokorta f’żaqqha,” is the granddaughter of President George Vella, and the daughter of former MFSA CEO Joseph Cuschieri of Viva Las Vegas fame who blew his organisation’s travel budget to smithereens.

Katrina Cuschieri

A second “independent director” is Abigail Cutajar, a staunch canvasser of Miriam Dalli, who just before the last general election was given a €70,000 contract by Dalli for unspecified duties.

A third “independent director” is Luke Cann who was a partner at Nexia BT, the sleaziest accounting firm in Malta. He is the husband of Tara Cann Navarro whose name appeared on a court issued freezing and garnishee order on all assets held by Keith Schembri and his accountants at Nexia BT.

The fourth and last “independent director” is Angela Azzopardi, the Secretariat Head at the Ministry of Finance under Clyde Caruana.

If Miriam Dalli absent mindedly slips her hand into the Clearflowplus cookie jar, the “independent directors” must bite her hand. Unless they are distracted, chewing their big bone. Rule 5.119 of the Capital Markets Rules prepares for the worst while the poor bondholders can only hope for the best on their unsecured bonds. For between the rules and the bondholders, stand the annointed watchdogs, “tagħna lkoll” in the era of widespread “ħniżrijiet.”

The water situation in Malta is horrendous. Last year, 31.5% of the water produced by WSC was either stolen or lost to leakages. Imagine, if you can, a factory that keeps losing 31.5% of its manufactured goods. Likewise, when it comes to treating our wastewater from chemicals and other pollutants, we are at the rock bottom spot in the EU (see below). We are poisoning our fresh water supply through untreated wastewater. This is what you get when you throw in immature and juvenile 23-year olds into the fray while the island is burning and the water infrastructure is falling apart like our electrical cables.