Prime Minister Joseph Muscat officially announced that a deal had been struck with Crane Currency two months before the approval of financial incentives by Malta Enterprise.
Although neither the Office of the Prime Minister nor Malta Enterprise would say when Crane Currency’s application for financial assistance was approved by the competent authorities, the Times of Malta was told this occurred on November 3, almost two months after Dr Muscat’s media announcement in the US.
Dr Muscat flew to Boston on September 21 to “sign” an agreement with money printers Crane Currency to invest about $100 million in a new state-of-the-art facility in Malta. Although the project was flagged as ‘a done deal’, internal Malta Enterprise documents show that the green light for hefty State financial assistance came later.
According to the documents, Crane Currency made it clear from the start it would only invest in Malta if it was given a “significant amount of access to finance-related assistance”.
Although this is a positive investment for Malta, things should not be done this way
Sources close to Malta Enterprise said the government agency board reviewed the application for incentives on November 3 when the matter was discussed briefly before being approved.
“At that point Malta Enterprise had no other option but to say yes. There was no way Malta Enterprise was going to block the €81 million exposure it committed itself to once the Prime Minister had already told the country this was a fait accompli,” the sources said.
“Although this is a positive investment for Malta, things should not be done this way. Malta Enterprise simply had no choice but to approve the deal,” the sources added.
The Office of the Prime Minister was asked what had the Prime Minister signed in Boston and to provide a copy of the document/s but no replies were forthcoming by the time of writing.
The Sunday Times of Malta has reported that, through the deal approved by Malta Enterprise, the government would be building a €27 million facility for Crane Currency in Ħal-Far and providing a €54-million guarantee on a loan to be issued by Bank of Valletta so that the American company could buy the plant and equipment.
Also, the government would be subsidising up to three per cent of the interest payable by the company, in such a way that the effective interest borne by Crane shall be at least 1.5 per cent”.
Questions were immediately raised over the potential conflict of interest the Prime Minister’s chief of staff, Keith Schembri, could have had in the deal since he is also the owner of Kasco Trading, agents for paper, raw materials and printing machines.
The Prime Minister himself had singled out Mr Schembri as “the catalyst” behind the deal. When later pressed on the matter, Dr Muscat said Mr Schembri was not directly involved in the negotiations.
With operations planned to start in 2018, Crane Currency is expected to employ about 300 employees by the third year.
ivan.camilleri@timesofmalta.com