Issue link: https://maltatoday.uberflip.com/i/679878
maltatoday, SUNDAY, 15 MAY 2016 26 Letters THERE are no great expectations from creditors of the failed Price Club super- market chain, as little if any of the pro- ceeds from the sale of the Swatar outlet will reach their pockets. Chasing over Lm8 million in debt af- ter the Price Club chain crashed in 2001, banks are expected to scoop up most of the money from the sale of the Swatar build- ing, one of several of Price Club's outlets. The building was recently purchased by HSBC UK, as part of a €7 million (Lm3 million) capital investment for a global call centre. Creditors are hardly likely to see any money from the sale since it will be the banks, as hypothecated creditors, to be first in line to collect their dues. "Only if the corporate veil is lifted off the company will the other creditors collect any residual value, if any," liquidator An- drew Borg Cardona told MaltaToday. Borg Cardona has filed two actions against Priceclub Holdings, requesting the company's liquidation, and asking the court to "lift the veil" and find the whole group of companies responsible for the in- solvency of Priceclub Operators. Priceclub Operators was the revenue- generating arm of directors Chris Gauci, Wallace Fino and Birkirkara FC president Victor Zammit, who lost just a Lm101,000 capital base when Price Club crashed. The rest of the capital was spread onto other associated companies, leaving credi- tors indebted to Priceclub Operators chas- ing Lm8 million in debts. That way, the liquidation of Priceclub Operators would not affect the assets in the other compa- nies. The sale of the Swatar outlet may bring no joy to the creditors of the doomed su- permarket chain, since banks will be first in line to collect the monies owed to them. Borg Cardona has also filed actions against the directors for a declaration that they were guilty of fraudulent trading, and another to declare that they continued to trade when the company was insolvent. Victor Zammit has been accused of be- ing "dishonest" with main creditors for having presented a positive picture of the company, at a time when Priceclub was facing losses and a burgeoning debt. When creditors were asking Zammit about the precarious situation of the dis- count shopping chain by September 2000, Priceclub Operators was running at cu- mulative losses of Lm1.13 million, increas- ing to Lm1.55 million six months later. Zammit claims his accountants and con- sultants had told him the company was heading for breakeven, but the chain was already doomed from the start. It regis- tered pre-tax losses of Lm260,000 as early as 1999 and only registered a Lm21 million turnover by taking over two other super- markets. Mizzi accused Zammit of giving the im- pression the multi-million figure had not been the result of the merger: "You said directors were confident of a better per- formance when losses had in fact trebled." By 2001, creditors stopped advancing credit to the supermarket, and directors Zammit, Fino and Gauci produced a 20 per cent investment proposal to credi- tors. Liquidato Andrew Borg Cardona described the proposals as an attempt to "defraud third parties to the tune of Lm1 million through their estimation of the value of Priceclub at Lm5 million, when the company was effectively bankrupt vir- tually from its birth…" No joy for Price Club creditors from Swatar sale Send your letters to: The Editor, MaltaToday, MediaToday Ltd. Vjal ir-Rihan, San Gwann SGN 9016 | Fax: (356) 21 385075 E-mail: newsroom@mediatoday.com.mt. Letters to the Editor should be concise. No pen names are accepted. Setting the record straight Ronald Agius claims my article contained unfounded allegations and innuendos, and that I chose to omit important information to suit my agenda and that I was ef- fectively misleading your readers. I made no unfounded allegations and, unlike him, can prove every- thing I claim. 1. The Strickland Foundation (SF) was set up by my aunt "for herself and her heirs in perpetu- ity" and not for the SF council (composed of the executors, their sons and their friends) to compete with Mabel Strickland's heir. Nor was it set up to change her foundation's aims to suit their whims, pay themselves generous stipends and donate to charitable causes, many of which (however worthy) simply did not fall within the causes originally designated by my aunt. 2. Agius deliberately misquotes the will on at least three counts. He states I was bequeathed 99 shares in Allied Newspapers. Her will says nothing of the sort, not even the number to my future shareholding. As Mabel's heir, I became under Maltese law the legitimate owner of her entire estate, including her 92% shareholding in Allied, subject, of course, to me paying off any debts owed by her, any death duties due on her estate, and any valid and quantifiable legacies she left in her will. 3. Agius stated that 581 shares were bequeathed to the SF, which is also not true. The number of shares Mabel bequeathed was clearly written as 508, although the share certificate details that followed could possibly suggest a different figure. This makes the bequest impossible to quantify. Under UK law (on which Maltese company law is based) this uncer- tainty would normally make such a bequest fail. These shares could not be owned by the SF because of the provisions of the Com- panies Act and the Articles of Association of Allied Newspapers Ltd. Agius does not tell readers that the shares were hurriedly transferred from the executors (on behalf of the estate) to the SF without the consent of the heir, 22 years after Mabel died but only a matter of days after I filed my first court case. 4. My aunt left me a legacy of the "use and habitation rights" at Villa Parisio, her home for 43 years until her death and one I shared with her for part of that time. Agius, the execu- tors and the SF continually and deliberately misquote the words "Guests Rooms and Bathrooms" to be in the singular. In fact, the manuscript will states otherwise (regardless of any transcrip- tion errors made by the notary publishing the will). The be- quest shows clearly that my aunt wanted me to live in the villa as she also made very clear to me. Instead the executors gave possession of the villa to the SF, by stealth, without ever consult- ing me as heir – the only person given rights to inhabit the villa. Nowhere in my aunt's will does it state that her home was to be made into a conference centre. 5. I did, indeed, originally vote for Adrian Hillman to be elected managing director of Allied, but all minority shareholders were only informed shortly before the AGM that the outgoing MD intended to retire at that meeting. Surprisingly, only one candidate was put forward (Hillman) and we were advised that he already had the support of the SF council, so it was effectively a 'done deal'. I have often challenged the accu- racy of the Allied AGM minutes and long campaigned against their restrictions on sharehold- ers raising relevant matters at the AGM as "Any Other Business"; I believe Agius is, on this occasion, stating at least part of the truth. 6. Agius stated that Villa Parisio belongs to the SF but all my aunt's property passed to me on her death, subject to me passing on any valid and quantifiable legacies in her will. The villa should have been a valid and easily quantifi- able legacy since it was defined at the time of its purchase. Mabel, however later purchased or leased other adjoining properties con- sisting mainly of farmland (still farmed today) which the execu- tors also claim was bequeathed to the foundation (along with all the family's furniture, collections and personal and family papers). Since my aunt's death in 1988, the family papers, which include my aunt's legal files concerning the revised will and the drafting of the foundation constitution have been persistently hidden from me, first by Guido and then by Mario de Marco, despite them legally belonging to me. 7. Agius stated that the SF acted "prudently all the way", wait- ing for the courts to pronounce themselves on the matter. On the contrary, having taken possession of the villa from the executors, by stealth, the foundation proceeded to make the villa uninhabitable for a family with children, locked the family out of their rooms and removed many of their posses- sions before the court has even decided to whom these posses- sions belonged. They continue to harass my family even now, on a daily basis. 8. Agius states that the founda- tion was bequeathed only one property, which was the villa, but fails to point out that it was, by far, Mabel's most valuable property. I, on the other hand, inherited the rest of my aunt's properties and I had to sell the majority of Mabel's other proper- ties, immediately, in order to pay off the onerous death duties on her estate, which are always pay- able by the heir. The SF, meanwhile, purchased another property next to the villa, with several rooms and a garage large enough to accommodate six cars. As a legal entity in its own right, it was permitted to buy property but it is not clear how this purchase contributes to the management of the foundation's assets. This property is currently used to hide furniture and files taken from the villa before the court has ascertained their true ownership but is, nevertheless, available as an alternative seat for the SF. 9. Agius questions why it is "scandalous" for a company to pass on dividends to its share- holders. This was precisely my point. The SF was not an Allied shareholder until 2010 yet the SF was in receipt of "dividends" directly from Allied for 12 years before that date and, as such, was highly irregular. This practice started when Agius was MD of Allied. From information I have received, these irregular pay- ments total close to €3 million, which should be a matter of public interest. Furthermore the validity of this irregular 2010 share transfer is now the subject of another court action. If Agius and his council members were ever to consider applying common sense to this unfortunate situation, that could be so easily resolved, they would have transferred the founda- tion's seat years ago (as my aunt provided for in the first article of her foundation deed), and more importantly, from the outset, consulted regularly with Mabel's heir in conjunction with her executors, on issues that affected them both, rather than assume that as they had might, they could impose their will on the heir unilaterally. The Sunday Times of Malta and The Times, meanwhile, do not consider this case to be newsworthy, thus depriving their readers of a major news story, and where they have made the briefest reference, their reporting has not been wholly correct and in one case misleading, where my legitimate right of reply has also been refused. Robert Hornyold Strickland Villa Parisio, Lija 14 May, 2006 The Sunday Times of Malta and The Times do not consider this case to be newsworthy, thus depriving their readers of a major news story