Manoel Island: Who is misrepresenting the facts?

The company announcement 205 issued by MIDI plc on the Malta Stock Exchange on 25 June 2025 accuses my earlier article of being speculative in nature. In actual fact, it was MIDI plc’s prospectus for the €50,000,000 4% Secured Bonds 2026, dated 28 June 2016 that was of a highly speculative nature.

The question is: Was such a bond suitable for sale to retail investors such as the pensioners mentioned by the prime minister? Was the bond mis-sold when the nature of the company’s business was so speculative?

While in the prospectus MIDI did indeed list the power of government to rescind the emphyteutical deed after 31 March 2026, it was also made clear that the company was still in the process of choosing a firm to draw up the concept for the development. There was no plan for the Manoel Island project. There was no money in place to finance the project.  MIDI could not raise the finance on its own and it was clear that they needed third parties to carry out the project.

They had no permits in hand as they did not even know what they were going to do on Manoel Island. Given that they had no plan, they had no idea whether they could eventually reach the contractual completion date before fines would start kicking in and by the date that the government’s power to rescind would come into effect.

As I said in my previous article, not one cent of the proceeds from the 4% Secured Bonds 2026 was used in the Manoel Island project. The proceeds went to repay earlier bonds and loans from local banks.  MIDI did not deny any of this.

To top it all, no mention in the prospectus was made as to the source of funds for the redemption of the bond.

Was such a highly speculative bond suitable for sale to the pensioners mentioned by the prime minister?

Did MIDI ever once explain to the public that the Outline Development Permit PA 9407/17 was annulled through their own misdeed? Did they explain to the market the impact on their ability to reach the 31 March 2026 deadline when the emphyteutical grant could be rescinded?

MIDI are making a big emphasis on their claim for extra time. That is not a matter for me to judge but for a court of law or an independent arbitration panel to decide upon after all parties state their case.

With regards to the 2024 financial statements, MIDI themselves admitted that “discussions with government are ongoing with regards to the specific remedies available in the Deed of Emphyteusis entered into on 15 June 2000… to the extension to the substantial completion date detailed in the deed for the entire development.”

In the last notice MIDI said: “The board also declared that the company was actively engaged in discussion with government and the board was, at that time, confident that the successful completion of the project would be achieved.”  The prime minister has stated that he was not aware of any such discussions. Who is correct?

Although it is clear that there was no agreement for an extension of the deadline provided in the deed, the board was confident that they would complete the project successfully. What gave them this confidence? Without an extension, the site would have no value to the company. Without such certainty why did they keep the site at the same value? Why was no provision for impairment made in the financial statements? Likewise, why did the auditors not make reference to the potential loss in value since the site would be subject to rescission of the lease within 15 months of balance sheet date? Why were the financial statements issued with an unqualified audit report?

Despite MIDI claiming that they are addressing factual misrepresentations, all the facts I used are derived from their documents. None of the facts I mentioned have been denied in the company announcement.

The question remains: Were these bonds suitable and appropriately sold to the retail investors, many of whom, as the prime minister said, are pensioners?

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