Have the retail investors in MIDI plc been treated well?

On 28 June 2016 MIDI plc issued a prospectus for €50,000,000 4% Secured Bonds maturing in 2026.  In the prospectus MIDI stated that it “intends to proceed with a professional investor search, with the aim of identifying a strategic partner with whom to undertake the Manoel Island project.”  It also said that it was seeking to prepare a masterplan for the project. 

At the same time among the Risk Factors they “may not be able to obtain the capital it requires for development on commercially reasonable terms” and that “the entire development must be substantially completed by 31 March 2023 (article 8.1.4 of the Emphyteutical Deed). Failure of the Issuer to do so will result in penalties as described in the said article 8.1.4, and should the delay persist for more than three years, the Government of Malta shall have the right to rescind the Emphyteutical Deed and Article 21 regarding dissolution of the Emphyteutical Deed shall apply.” 

At this point the prospectus was stating that they had less than seven years’ time to draw up a masterplan for Manoel Island, apply for an Outline Development Permit (ODP), do an EIA, apply for full development permits (FDP) and construct the as yet unknown project and infrastructure before government would be able to take back the land. All the while they did not have the money to finance the project. 

On top of that not a cent of the €50 million would be going towards the project but only to replace maturing debt. There was no assessment that the project would be ready before the government could take back the land. How could they? The masterplan was still a thought. How did the listing authority allow such bond to be offered to the general public? 

The following year, MIDI presented its masterplan which included two bridges, approximately 12,000sq.m of land reclamation opposite the Gżira shore, extension of the yacht yard, extensive rock excavation on land, seabed excavation to widen the sea channel, parking spaces for hundreds of cars, shops and 650 apartments. How could such a project be completed with the clock ticking till the date the government could take back the land? 

The outline development permit was granted by the Planning Authority in March 2019 but then on 17 June 2020 the permit was annulled when an appeal by FAA was upheld by the tribunal after it was found that MIDI had engaged the son of a director as an ‘independent’ consultant on the EIA who had signed a declaration of independence. 

MIDI issued a terse company announcement stating that “The EPRT decided that a fresh EIA must be submitted by the Company to the Environment Resources Authority (“ERA”) in order for the PA to reconsider the application.” No mention was made that it was the result of their own unethical or illegal behaviour in engaging a supposedly independent consultant… who was clearly not independent. 

No mention was made there were only two years and nine months left on the clock till the 2023 deadline. They had to redo the EIA and get approval of the outline permit and then apply for the full development permit. 

The ‘misbehaviour’ was not an oversight by MIDI. CEO Mark Portelli admitted in an interview with the Times of Malta published on 15 April 2024 that he regretted having commissioned the above-mentioned consultant. 

FAA wrote to the Securities and Market Supervision office of the MFSA in August 2020 reporting the unethical behaviour and the financial consequences of their actions. MFSA promised to look into the matter but FAA say that MFSA never reported back. Apparently, everything was swept under the carpet. 

The Prime Minister has now stated that he is going to look into the contract. It was also reported that the daily fines contemplated in the contract for missing the 2023 deadline are not being levied. 

On 29 April 2025 MIDI plc published their annual report and financial statements. Yet the auditors did not see it fit to qualify their report given that the company was in default with a year and a half left on the clock before the Government of Malta could take back the land.  

The auditors gave a negative assurance—they declared that they had no information to contradict what the company had told them, which means the government was not going to take back the land and that they would be receiving the full development permit. 

What do the regulatory bodies have to say to the minority shareholders and bondholders? Have they been kept informed?

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