MFSA awards Keith Schembri’s company €40,000 contract for paper

Kasco Limited, the company owned by former government chief of staff Keith Schembri, was handed close to €40,000 for paper through a “contract” awarded by the Malta Financial Services Authority (MFSA) in January, according to the Government Gazette.

The announcement referred to Article 151 of the public procurement regulations, which is a “negotiated procedure without prior publication” – a direct order.

The MFSA later issued a clarification saying it had purchased the paper through a tendering process (MFSA 05/19), referring to Article 111 (2). The Financial Services Authority acknowledged that the Government Gazette had erroneously cited Article 151 and would be issuing a correction in the next publication.

Schembri was forced to resign as chief of staff of disgraced Prime Minister Joseph Muscat following mass protests in Valletta in late 2019. Allegations implicated him in the assassination of journalist Daphne Caruana Galizia and political interference in the investigation. He has denied any involvement.

Schembri tendered his resignation from his post at the Prime Minister’s Office in November 2019.

Kasco continues to be contracted by government ministries and entities for the supply of paper. In 2019, these included a €9,600 direct order by the Justice Ministry. For this, Schembri’s company was asked to provide quotations for the supply of A4 and A3 photocopy paper to the law courts.

Enemalta, a State entity, also contracted Kasco for the supply of photocopy paper totalling €11,650 in October 2019.

Schembri’s involvement in the paper supply industry, which Kasco dominates, has been called out in a report by international press freedom organisation Reporters without Borders (RSF).

The NGO’s report, ‘Newspapers that Never Arrive’ refers to Schembri’s ownership of a company that supplies paper to media and distribution companies, as an example of pressure on newspaper printers and distributors that may result in censorship and infringements on media freedom.

This same report had noted the allegations of kickbacks involving Schembri and Adrian Hillman, the former managing director of Allied Newspapers, publishers of The Times of Malta and The Sunday Times of Malta.

A magisterial inquiry was launched almost three years ago but there is no indication of the findings.

The paper industry is only one sector that Schembri’s businesses dominate in Malta. For example, when Malta changed its manufacturer of banknotes to Crane Currency, Muscat had admitted it was Schembri who “lured” the company to the island. It has since been implicated in “one of the biggest financial scandals in the history of Liberia”.

It was then discovered that Crane Currency would be purchasing printing equipment by Komori, products that were distributed locally by Schembri’s company Kasco.

If it’s not Schembri receiving the money, then it’s his wife. As a shareholder within Carmel Vella Ltd, Josette Schembri Vella is linked to one of the companies that received millions worth of direct orders and contracts from the government for road work projects, according to official documents.

The Shift had revealed how the company in which Schembri Vella is involved, Central Asphalt Ltd, received €14.6 million worth of direct orders and contracts from the government between January 2013 and September 2019.

The article has been updated following clarification by the MFSA on an error by the government’s Department of Information that listed the contract as a direct order rather than a tender.