Businessman Ryan Schembri fled Malta last month.

Suspicion of shady dealings by a man who suddenly left the island owing millions of euros to investors emerged when he told his business partner a profitable venture they shared in Libya was losing big money.

Ryan Schembri left Malta with his family towards the end of September after loan sharks threatened to harm his son if he did not pay up. His business partner for 14 years, Etienne Cassar, remains shocked by the news.

He said he was not facing similar threats as Mr Schembri. “Nobody has spoken to me. I never had anything to do with them,” he told Times of Malta.

Events in Libya caused Mr Cassar to suspect his trusted partner was deceiving him. They had opened a super-market together there that was doing very well, leading to the launch of an additional distribution service.

The war had an impact on the supermarket operations but they kept their staff because the distribution service was still doing well. Then, it was no longer safe for people to remain, so they were called back. At that point, their main contacts were lost.

Mr Schembri suddenly told his partner the business had lost millions of euros. This did not convince Mr Cassar.

If the transactions went through our company we should have been covered but I suspect they didn’t

“When we called our people back, there was a bit of a panic obviously but it does not justify, even on a minimal level, the amounts of losses he mentioned,” Mr Cassar said.

He referred to audited accounts that showed a profit even during the war. That profit should have more or less covered losses, according to Mr Cassar.

“If the transactions went through our company we should have been covered but I suspect they didn’t,” Mr Cassar said.

He became aware his partner had run into financial trouble last April. Mr Cassar said he was in charge of operations and left the financial side to Mr Schembri.

“The company accounts were solid. At the time when things started to emerge in recent months, it became obvious that there were underhand dealings. But before April all was good. Accounts were audited by an independent firm,” he said.

The auditor resigned from a number of companies related to Mr Schembri and Mr Cassar last June. “The auditor then wrote to me saying he is resigning because there were amounts unaccounted for and Ryan had no explanation,” Mr Cassar said.

This coincided with the transfer of companies and shares to another company owned by third parties seemingly established for the purpose – D. More Holdings.

Mr Cassar explained these company transfers saying his partner had previously entered into commitments with certain owners of the newly-established company which he had not been able to meet. Instead, he transferred companies and shares.

The same company also took over More supermarkets, one of the business ventures entered into by Mr Schembri and Mr Cassar. The owner, however, told Times of Malta negotiations had been ongoing since February and they had not been partners in the supermarket chain before then. There is now no connection between More supermarkets and Mr Schembri.

Mr Cassar is also suspicious of his partner’s activities in Croatia. “Ryan had a company in Croatia. I had nothing to do with it. Some things were being handled through that company. What and how, I don’t know. But, recently, he came to tell us that we are under investigation for money laundering,” he said.

Mr Schembri apparently turned to shady characters to help him out but that only made matters worse.

Mr Cassar cannot confirm the figure of €40 million said to be owed to investors and suppliers by Mr Schembri. Neither can the police at this stage as investigations are ongoing.