Unpaid Dues Spark Legal Action Against Malita Investments
Two Maltese contracting firms have initiated legal proceedings against Malita Investments plc, a government-owned company, seeking a combined total of over €624,000 in unpaid fees. The claims arise from work on a flagship social housing project in Ħal Farruġ, Luqa, which has reportedly come to a standstill, and another housing development in Msida.
Court records indicate that Calibre Industries, part of the Cortis group, filed two judicial letters in late August, claiming more than €545,000 in outstanding payments. A month later, Vella Falzon Building Supplies followed suit, demanding just over €79,000. While Calibre Industries' claim is linked to the Ħal Farruġ project, the dues sought by Vella Falzon Building Supplies are believed to be for works on the Msida housing development.
Malita Investments Cites 'Strategic Reassessment' and Liquidity Constraints
Malita Investments, which is 82% state-owned and listed on the Malta Stock Exchange, has confirmed the suspension of works at the Ħal Farruġ site. However, the company insists that this decision was taken on its own initiative, as part of a 'strategic reassessment' of its housing projects. This contrasts with earlier reports suggesting that work stalled due to Malita's failure to settle outstanding payments with contractors.
The company has acknowledged experiencing 'liquidity constraints,' which earlier this year led to its decision to suspend dividend payments to shareholders. Malita Investments stated that its strategic review is expected to conclude by the end of the year, promising to inform investors of any decisions made. Despite the legal challenges, Malita has publicly stated that it is 'not expecting a government bailout.'
The Ħal Farruġ Social Housing Project and Company Background
The stalled project in Ħal Farruġ is a significant undertaking, planned to include 267 apartment units and initially slated for completion by 2026. This development is partly financed by a €22 million loan from the European Investment Bank (EIB). Malita Investments was established by the government to finance large-scale development projects and has been involved in several prominent Maltese developments, including the Valletta City Gate project, the Valletta Cruise Port, and Malta's airport. More recently, its focus shifted to affordable housing projects, with the company being moved under the Ministry for Affordable Accommodation two years ago.
Questions have been raised regarding Malita Investments' transparency, as the company has not issued a company announcement to its shareholders on the Malta Stock Exchange concerning these significant legal claims. This situation unfolds amidst previous controversies, including the resignation of former CEO Jennifer Falzon after being named in a court ruling related to alleged voter manipulation.
5 Comments
Michelangelo
It's understandable that a large project might face strategic reassessments, but leaving contractors unpaid creates a huge ripple effect on small businesses. Both sides have valid points to consider.
Kyle Broflovski
The 'liquidity constraints' explanation makes some sense given economic pressures, but it doesn't excuse the apparent lack of communication with contractors or shareholders. Better planning and disclosure are essential.
Stan Marsh
Social housing stalled, money owed, and excuses. This government is failing its citizens on every front.
Michelangelo
While the need for social housing is critical, Malita's financial practices and transparency issues are deeply concerning. They need to balance social good with sound management.
Donatello
Unpaid contractors mean real people lose money! This is completely unacceptable business practice.