Concert contractors left unpaid as €500,000 MTA sponsorship vanishes

Seven Maltese companies, including Public Broadcasting Services, have been left high and dry with hundreds of thousands of euros in unsettled bills for services they gave in relation to the staging of a ‘free’ concert held on the Floriana Granaries in October 2019.

The concert was organised by the so-called ‘Mediterranean Tourism Foundation’ – an offshoot of the Malta Hotels and Restaurants Association – and funded by a €500,000 sponsorship from taxpayers’ funds fronted by the Malta Tourism Authority (MTA) and the Tourism Ministry, at the time run by disgraced former minister Konrad Mizzi.

The Shift can reveal that the Italian company contracted by the MHRA to organise the concert, World Entertainment Company SRL, filed for bankruptcy just a few weeks after receiving the total half-million-euro payment from the MTA.

Investigations by The Shift show that the company has now been disbanded, and it is very unlikely that any of the Maltese companies, including familiar names in Labour circles such as Nexos Lighting, Ray Vella & Co. and Tec Ltd, will receive any of their owed dues.

Konrad and the MHRA’s concert

The idea of holding the Mediterranean Stars Festival on October 4 2019, with a line-up of popular Italian singers, was the brainchild of Andrew Agius Muscat – the current secretary general of the MHRA – who for some time also served as chairman of the Public Broadcasting Services until he was suddenly asked to resign.

Together with MHRA President Tony Zahra, he set up the Mediterranean Tourism Foundation, an NGO with the aim of “promoting peace and stability in the Mediterranean”.

Through the help of his contacts, mainly then-tourism minister Konrad Mizzi, the MTA decided to issue a €500,000 sponsorship to enable the Foundation to organise the concert.

On its part, Agius Muscat’s Foundation ‘contracted’ World Entertainment Company SRL to manage the organisation of the concert, in conjunction with Radio Italia.

During the concert, which attracted thousands of mainly Maltese residents thanks to the fact that it was ‘free’, Mizzi also threw a lavish party funded by the MTA on the roof of the Catholic Institute for his constituents and Labour Party delegates.

Asked to state what happened to the sponsorship money given for the concert, Agius Muscat acknowledged that the company that was given the massive sponsorship “went into liquidation after having received full payment (from the MTA)” and that “some Maltese subcontractors had not been paid in full for their services”.

He said that neither the MHRA nor the Foundation had anything to do with the MTA funds. “In spite of the fact that the MHRA and the Mediterranean Tourism Foundation were the organisers of this idea, they were not party to any contractual agreements for this event and hence received no funds either from the government or the Malta Tourism Authority or any other government entity”.

The MTA has refused to divulge any details about the sponsorship and has failed to state what contractual obligations it imposed in connection with the spending of half a million euros in taxpayer funds.

It also turned down a Freedom of Information request to provide a list of sponsorships it distributed during 2019.

Labour contractors caught unaware and exposed

Industry sources told The Shift that despite the pressure made so far on the government to try to resolve the issue, the subcontractors involved – all closely linked to the governing Labour Party – have not managed to solve the issue and have had to file their grievances in court.

A total of seven cases have been filed so far against World Entertainment Company SRL. 

While PBS is claiming €37,500 in unsettled bills, Nexos Lighting is owed €96,000, Besteam Audio €54,000, I Can Ltd €41,000, Istage Ltd €45,000, Ray Vella & Co €35,000 and Tec Ltd €26,000.

Legal sources told The Shift that while the Maltese courts could eventually decide in favour of the Maltese companies, it will still be very difficult for them to get their money as “no one knows who and where the money paid by the MTA ended up”.

All the companies in court are the same companies that have received millions in direct orders from the government since Labour was returned to power in 2013, and are also known organisers of all Labour Party mass events.

During the last few years, particularly when Konrad Mizzi was at the helm of the Tourism Ministry, the MTA dished out millions in sponsorships for the holding of many events, without any form of transparency and accountability.

A Konrad Mizzi crony with a criminal record, Lionel Gerada, has even been employed as the MTA Events director, giving out millions in sponsorships to Labour party friends, cliques and former business partners. 

Gerada is still in charge of the MTA’s events department despite the change at both the helm of the Tourism Ministry and Castille.