Two men claiming they loaned €3.5 million to Ryan Schembri, the former owner of More Supermarkets, have been granted garnishee orders securing the money they are owed, Times of Malta has learnt.
More Supermarkets hit back by filing lawsuits claiming the money had been loaned to Mr Schembri, who has since fled the country, and he was not authorised to represent the supermarket chain.
Alexander Farrugia and Edmond Mugliett say Mr Schembri borrowed €1.5 million and €2 million from them, respectively. The loans were covered by a contract signed before Notary Claire Camilleri on June 20, 2014, they submitted in court.
The other parties to the contract are Mr Schembri, in his own name and on behalf of Cassar and Schembri Marketing Limited, the company of which Mr Schembri was co-owner and director.
The contract also shows that Mr Schembri appeared as the representative of companies that own More stores in Mosta, Fgura and Paceville while he and director Adrian Agius appeared jointly on behalf of More Supermarkets (Ħamrun) Limited.
They insisted Ryan Schembri could never have signed the contracton behalf of store owners
On the basis of the contract, the court, presided over by Madam Justice Lorraine Schembri Orland, issued the garnishee orders, which were eventually confirmed by Mr Justice Lawrence Mintoff. Mr Justice Mintoff turned down an application requesting the orders’ suspension due to other pending judicial proceedings. He said the court could only suspend a garnishee order if one of the parties claimed that the signature on a bill was not theirs.
Despite this setback, More Supermarkets, joined by the new owners of the chain – D More Holdings Limited, owned by Darren Casha – filed lawsuits against Mr Mugliett and Mr Farrugia, arguing that the contract was fraudulent, that they were never in receipt of any such funds and demanding they be released from the contract.
They also insisted that Mr Schembri could never have signed the contract on behalf of the Mosta, Fgura and Paceville store owners because he had resigned his directorship on May 7, more than a month before the signing.
Moreover, they continued, Mr Schembri and Mr Agius acted beyond their powers when they signed on behalf of More Supermarkets (Ħamrun) Limited because the company had decided, on June 11, that no agreements could be signed by any member of the board of directors without prior approval at a general meeting.
The companies, represented by lawyer James D’Agostino and Legal Procurator Veronica Rossignaud, further claimed that Mr Schembri and Mr Agius had not been authorised to sign any agreements on their behalf, making the contract “false and fabricated... null and void”.
Mr Schembri left Malta with his family towards the end of September, with sources close to the family claiming that loan sharks threatened to harm him and his son if he did not pay. There has been no sign of him since.
Mr Schembri’s companies ran into financial trouble at the beginning of last year. Sources say he tried in vain to make up for the losses. The situation worsened in April and, a month later, the companies and shares were sold to D More Holdings Limited.
Unconfirmed reports said Mr Schembri owed about €40 million to various investors, who had been promised high returns.
The Ħamrun outlet has been “temporarily” closed since last October, when Enemalta cut off power over a pending €50,000 bill. It later emerged that the company had also accumulated €250,000 in unpaid rent for the Ħamrun outlet alone.
Late last year, The Sunday Times of Malta reported that D More Holdings, which owns the debt-ridden More Supermarkets chain, is facing liquidation after a failed attempt to place it in administration.