The Prime Minister lies blatantly in defence of his chief of staff

The Prime Minister this morning lied blatantly in defence of his chief of staff, saying in a video uploaded on the Times of Malta that Keith Schembri “no longer has anything to do with business” and that he has “relinquished control of his business”.

This is absolute rubbish, as even the most cursory visit to the Companies Registry on line will show. The only thing Keith Schembri did after becoming chief of staff to the Prime Minister was to step down as director of his companies and appoint his own father in his stead. He remains effectively the sole shareholder in the main company, Kasco Holdings, controlling 99.9% of it while his father has the other 0.01%.

That he controls the company is recorded in black on white in the most recent financial statements for Kasco Holdings Ltd, filed at the Companies Registry (see below).

In addition to owning and controlling the whole of Kasco Holdings Ltd, which owes million to the banks in Malta despite having registered a loss of more than €400,000 for the financial year ending 31 December 2014, with cost of sales and administrative expenses far outstripping revenue from sales, Keith Schembri also controls 50% of Kasco Engineering Ltd, all of Kasco Ltd, Kasco Recyling Ltd and Kasco Trading Ltd, 50% of Tekhne Industrial Ltd, 50% of Berner Malta Ltd, all of Graphic Supplies Ltd, and with his wife, all of FSV Ltd (which owns the shop called Loft) and 3City Designs Ltd (an interior design business).

Schembri is directly involved in all these businesses because – should these things have to be explained? – it is the shareholders and not the directors who control a company. They are the ones who OWN it. That is why, in a company’s financial statements, the controllers of the company are the names of the shareholders, and not the names of the directors. The directors are appointed by the shareholders and do their bidding. This is especially the case when there are only one or two shareholders, as with all these companies, because the control is direct, immediate and full.

But beyond that, it is spelled out in the financial statements for Kasco Holdings Ltd, that the many millions which the company owes to the banks in loans and overdrafts are NOT secured by immovable property but “a general hypothec over the company’s assets” – which include no immovable property – and “by pledges taken over various insurance policies, and by personal guarantees of the main beneficial owner”. That main beneficial owner is Keith Schembri himself.

In other words – because truly, everything has to be spelled out and still people get it wrong or get confused or believe those liars – THE PRIME MINISTER’S CHIEF OF STAFF DOES NOT ONLY CONTROL 99.9% OF KASCO HOLDINGS LTD, BUT HE ALSO STANDS, IN HIS PERSONAL CAPACITY, AS GUARANTOR FOR LOANS AND OVERDRAFTS OF MILLIONS WHICH HIS COMPANY OWES TO THE BANKS.

That is not enough spelling out, so here is some more: THIS MEANS THAT IF KASCO HOLDINGS LTD DEFAULTS ON ITS LOANS, FAILS TO PAY ITS OVERDRAFT, OR GOES BUST, THE BANKS ARE GOING TO COME LOOKING FOR THE PRIME MINISTER’S CHIEF OF STAFF, PERSONALLY, FOR THOSE MILLIONS AND HE IS NOT COVERED BY LIMITED LIABILITY BECAUSE HIS GUARANTEE IS PERSONAL.

Is that enough spelling out? Apparently not, so here goes: THIS IS A SITUATION IN WHICH THE PRIME MINISTER’S CHIEF OF STAFF IS A PERSONAL GUARANTOR FOR MILLIONS OWED TO THE BANKS BY THE COMPANY WHICH HE FULLY CONTROLS AT LAW.

As the son of a fireworks merchant, and that is quite apart from his life and career experience, the Prime Minister knows exactly what company law is in this respect. There is no way on earth he thinks that when you own 99.9% of a business and appoint your father director in your stead, it means that you “no longer have anything to do with the business and have relinquished control of it”. The Prime Minister is worse than a liar: instead of informing people of the facts and the truth, and educating them about matters like company law, he trades on their ignorance and abuses of it, manipulating and insulting the people whose votes he took.

There’s another point: the Prime Minister manifests clear, cold anger when challenged about Keith Schembri that he does not when challenged about Konrad Mizzi. That is the real relationship, between those two. Konrad Mizzi is just the one they brought in and are probably now seriously regretting it.