The legal defence team of Mambra Electronics, facing claims by a list of creditors, yesterday compared the system of fines on late VAT payments to the interest rates charged by usurers.

Josè Herrera, legal counsel to Mambra owner Joseph Pavia, said he had checked with the VAT department and discovered that his client owed a total of €850,000. Mr Pavia did not pay €350,000 in VAT while the remaining €500,000 amounted to late payments and fines.

Neither did Mr Pavia pay all the eco-contribution he owed because he felt he had been overcharged, Dr Herrera said.

The fines were so high that the rates his client was being charged could only be compared to usury, he told Mr Justice Tonio Mallia. "If I had to do that (charge such rates) then I'm sure I'd be arrested and charged in court."

The Civil Court yesterday held the first sitting after the VAT department applied for and obtained a garnishee order against Mr Pavia. Mr Pavia did not appear in court yesterday but his parents were present. His family says his whereabouts are unknown.

The lawyer told the court yesterday his client was ready to mortgage his villa at St Marija Estate in Mellieħa to pay for the debts and there was no need for the garnishee order.

He asked the court to grant his client, who was willing to cooperate, more time to reach an agreement with the department.

Through a reply filed last week by his lawyer, Mr Pavia had already said he was willing to hold talks with the VAT department. He blamed poor business and a recent hold-up as the reasons for his bankruptcy.

The court granted both parties until Thursday to reach an agreement.

The Mambra outlet at Luqa, which made a name for itself selling cut-price electronics and household appliances, closed for a long shutdown in July but never re-opened on August 5 as it was meant to. A day before the shutdown was to end Mr Pavia's sister, who worked at the shop, informed employees not to return to work.

Official documents deposited with the Registry of Companies show that on June 25 Mambra's auditor resigned and stopped representing the company.

Mr Pavia was also represented by lawyer Veronique Dalli.

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