Issue link: https://maltatoday.uberflip.com/i/1536815
9 maltatoday | WEDNESDAY • 25 JUNE 2025 OPINION Arnold Cassola Arnold Cassola is chairperson of Momentum Have the retail investors in MIDI plc been treated well? ON 28 June 2016 MIDI plc issued a prospectus for €50,000,000 4% Secured Bonds maturing in 2026. In the prospec- tus MIDI stated that it "intends to pro- ceed with a professional investor search, with the aim of identifying a strategic partner with whom to undertake the Ma- noel Island project." It also said that it was seeking to prepare a masterplan for the project. At the same time among the Risk Fac- tors they "may not be able to obtain the capital it requires for development on commercially reasonable terms" and that "the entire development must be sub- stantially completed by 31 March 2023 (article 8.1.4 of the Emphyteutical Deed). Failure of the Issuer to do so will result in penalties as described in the said arti- cle 8.1.4, and should the delay persist for more than three years, the Government of Malta shall have the right to rescind the Emphyteutical Deed and Article 21 regarding dissolution of the Emphyteuti- cal Deed shall apply." At this point the prospectus was stating that they had less than seven years' time to draw up a masterplan for Manoel Is- land, apply for an Outline Development Permit (ODP), do an EIA, apply for full development permits (FDP) and con- struct the as yet unknown project and in- frastructure before government would be able to take back the land. All the while they did not have the money to finance the project. On top of that not a cent of the €50 mil- lion would be going towards the project but only to replace maturing debt. There was no assessment that the project would be ready before the government could take back the land. How could they? The masterplan was still a thought. How did the listing authority allow such bond to be offered to the general public? The following year, MIDI presented its masterplan which included two bridges, approximately 12,000sq.m of land rec- lamation opposite the Gżira shore, ex- tension of the yacht yard, extensive rock excavation on land, seabed excavation to widen the sea channel, parking spac- es for hundreds of cars, shops and 650 apartments. How could such a project be completed with the clock ticking till the date the government could take back the land? The outline development permit was granted by the Planning Authority in March 2019 but then on 17 June 2020 the permit was annulled when an appeal by FAA was upheld by the tribunal after it was found that MIDI had engaged the son of a director as an 'independent' con- sultant on the EIA who had signed a dec- laration of independence. MIDI issued a terse company an- nouncement stating that "The EPRT de- cided that a fresh EIA must be submit- ted by the Company to the Environment Resources Authority ("ERA") in order for the PA to reconsider the application." No mention was made that it was the result of their own unethical or illegal behav- iour in engaging a supposedly independ- ent consultant… who was clearly not in- dependent. No mention was made there were on- ly two years and nine months left on the clock till the 2023 deadline. They had to redo the EIA and get approval of the outline permit and then apply for the full development permit. The 'misbehaviour' was not an over- sight by MIDI. CEO Mark Portelli ad- mitted in an interview with the Times of Malta published on 15 April 2024 that he regretted having commissioned the above-mentioned consultant. FAA wrote to the Securities and Market Supervision office of the MFSA in August 2020 reporting the unethical behaviour and the financial consequences of their actions. MFSA promised to look into the matter but FAA say that MFSA never re- ported back. Apparently, everything was swept under the carpet. The Prime Minister has now stated that he is going to look into the contract. It was also reported that the daily fines con- templated in the contract for missing the 2023 deadline are not being levied. On 29 April 2025 MIDI plc published their annual report and financial state- ments. Yet the auditors did not see it fit to qualify their report given that the company was in default with a year and a half left on the clock before the Govern- ment of Malta could take back the land. The auditors gave a negative assur- ance—they declared that they had no information to contradict what the com- pany had told them, which means the government was not going to take back the land and that they would be receiving the full development permit. What do the regulatory bodies have to say to the minority shareholders and bondholders? Have they been kept in- formed?