Staff on break at the Uniq Group offices at The Strand, where they are still working for a Romanian-licensed subsidiary. Photo: Chris Sant Fournier

The Malta Gaming Authority could in theory be sued by the Uniq Group for damages for loss of business if cleared of charges of illegal gambling, association with a Mafia organisation, money laundering and tax evasion.

The authority had suspended the group’s six licences in Malta after an international arrest warrant was issued last July for its directors, who have since been extradited to face trial.

In other jurisdictions, the law allows the regulator to put the company and its assets into the hands of a trusted administrator until the investigations and legal procedures are concluded. Should the owners be cleared, the administrator would then return the assets.

However, the law in Malta does not envisage this set up, and this is one of the clauses being considered in the new legislation for the gaming industry currently being drafted, authority executive chairman Joe Cuschieri said.

The shock disclosure about the alleged Mafia links was a “nightmare” for the gaming authority, although Mr Cuschieri said that it was important to understand that the alleged crimes – which took place in Italy – were serious enough for it to take prompt action, suspending its licence, extraditing its directors and seizing its assets.

“It was a secret investigation, going on for a few years. Arrest warrants were issued and six of those involved were associated with the Maltese licensee. The police executed the warrants and we immediately – since they were facing such serious accusations – reviewed their ‘fit and proper’ status as this had been compromised. We collaborated with the Italian regulator and police and were very swift in our reaction to the situation,” he said.

Mr Cuschieri reassured The Business Observer that all the official documentation submitted for the licences was sound and that the due diligence done before it was set up in 2010 was comprehensive.

“We did not overlook anything; far from it. The Italian regulator said the same thing about the operations in Italy: they did not find any reason to withhold licences. They had an excellent record with us, doing everything by the book. We never had any regulatory issues with them over the years and they did not commit any crime in Malta.

“Clearly there is always room for improvement but it is not reasonable to assume that any system is always 100 per cent fool proof 100 per cent of the time. You are talking about people here and very complex systems. But in this case, I can say with hand on heart that we found no shortcoming from our side.

“Nevertheless we are looking to see where we can tighten up the system even further. I can confirm that internally we made a lot of changes which will reduce risk substantially,” he said.

Could it happen again tomorrow? He admitted that criminals are often a step ahead and that the crimes become ever more sophisticated.

“I cannot give a guarantee that it will never happen again, just as other regulators have said. The risk appetite of the authority is understandably very low at the moment but we do not want to become unfair, and put obstacles in the way of those who genuinely deserve licences. You have to strike a balance using the right risk-based approach.

The dilemma for the authority was how far to take its reaction, he said, noting that one of the operators was still active in Italy as it was felt by the regulator there that it would be more harmful if it ceased operations instantly.

“The ‘fit and proper’ test was compromised by the European arrest warrant but should the company be put out of business and the employees lose their livelihood?

“The risk of being sued is there. This is why we are considering, in the new legislation, the option to put a company into administration so that operations could continue. Technically, the law does not allow us to do this now.”

The Uniq Group in Malta listed 42 employees in its last annual report, filed in 2015 for financial year 2013. At the time it closed, it was reported to have around 100, a fifth of them Maltese.

In 2013, the company reported a pre-tax profit of €765,000 from revenue of €38 million. The directors paid dividends of €1.74 million.

The group is still running back office operations from its office on The Strand, Sliema, for a Romanian-licensed subsidiary, according to Mr Cushieri.

Twenty employees staged a protest outside the Gaming Authority offices in Mrieħel last autumn, complaining they had not been paid since June.

Mario Gennaro, the alleged mastermind behind the Mafia scheme, was among the six Italians extradited to Italy from Malta. They were among 128 people listed in the investigation into money laundering by the Calabrian mafia, known as ’Ndrangheta. Hard cash obtain­ed through illegal means was allegedly recycled through ‘legitimate’ gaming outlets in Italy, Malta and other countries.

The Italian police seized assets worth €2 billion and issued 41 arrest warrants during the raids. Among the targets were 1,500 betting shops, 82 gambling websites, 45 Italian companies and 11 foreign firms, as well as “innumerable” property assets, the financial police said.

Apart from the firms run from Malta, two were in Spain, two in Romania and one in Austria.