Progress Press files legal bid to recoup $5 million from Keith Schembri

Allied Newspapers company starts legal proceedings to recover $5 million from Keith Schembri and former directors

Keith Schembri
Keith Schembri

The printing arm of Allied Group, Progress Press, has filed judicial protests in Court against the former chief of staff to the Prime Minister Keith Schembri and two of its former managing directors, to recoup some $5 million when it purchased printing machinery in 2008 from Schembri’s Kasco Engineering.

The company maintains that Keith Schembri, former directors Adrian Hillman and Vincent Buhagiar, Schembri’s partners Malcolm Scerri, Alfio Schembri and the company Kasco Engineering pocketed a total of $5 million from the $13.5 million deal.

The company said the deal had been “approved in good faith by the board of directors which was presented with the relevant bids by the then chairman and managing director.” 

“From evidence presented in Court, the company now understands that it was the victim of an illicit, secretive and abusive side deal that took place behind the backs of the company’s directors for the personal benefit of Keith Schembri and its two former managing directors,” acting CEO Alex Galea said.

“The company is seeking compensation for this incidence of corruption – which has caused significant pecuniary harm to Progress Press and Allied Newspapers, publisher of the Times of Malta – and looks forward to justice being served against the real perpetrators of crimes committed against the group,” Galea said.

Schmebri has pleaded not guilty to charges of corruption and giving false testimony. Schembri was charged together with his elderly father Alfio Schembri, a director of several of the Kasco companies, and business partner Malcolm Scerri and financial controller Robert Zammit.

Also accused was former Allied Group managing director Vincent Buhagiar. Not included in the charges was former Allied Group managing director Adrian Hillman, who is expected to be brought to Malta from the UK to face similar charges. Among the beneficiaries, it was alleged, was Hillman himself, as one of the Allied directors when Schembri’s Kasco group won a tender for the construction of Allied’s printing press in Mrieħel.

Progress Press ended up paying $6.5 million extra for printing machines with the money shared between Keith Schembri, Malcolm Scerri and Allied Group directors Adrian Hillman and Vince Buhagiar.

Police believe Keith Schembri paid out a total of $5.5 million in backhanders.