Progress Press: Court given run-down of Malta Enterprise investment application

The compilation of evidence against Adrian Hillman continued on Thursday with a senior Malta Enterprise official further explaining the cash grant given to Progress Press

Progress Press is a subsidiary of Allied Group, of which Adrian Hillman is a former managing director
Progress Press is a subsidiary of Allied Group, of which Adrian Hillman is a former managing director

The compilation of evidence against Adrian Hillman continued on Thursday, with senior Malta Enterprise official George Francalanza reappearing before the court to further explain the investment aid given to Progress Press for the purchasing of printing equipment.

Francalanza gave a run-down of the letters of intent and investment plan submitted by Progress Press to benefit from government’s investment aid scheme.

Through the scheme, interested companies would be able to enjoy a tax credit on a capital investment of choice. The value of the total package would depend on the size of the company.

The scheme would only apply on small capital investments, or in the case of larger and more labour-intensive companies, one can apply for investment aid on the wage costs of employees hired after the investment took place.

With regards to the Progress Press application, Francalanza said that the company presented an investment plan, and eventually two letters of intent.

The company’s total investment stood at €5.56 million, but the Malta Enterprise cash grant covered €1.6 million of this investment due to the relevant guidelines in place at the time. 

For Progress Press, the aid was calculated as 50% of 40% of the investment.

Francalanza specified that consumables are not covered by the Malta Enterprise financial aid scheme. He explained that consumables are costs that cannot be capitalised, but rather are presented in a company’s profit and loss statement.

“If two invoices are given to us, one for €1 million in machinery and €400,000 covering consumables, we only work on that €1 million invoice,” he clarified.

During cross-examination, defence lawyer Stefano Filletti remarked that the €5.56 million investment plan did in fact include consumables.

However, Francalanza specified that the letters of intent were limited to machinery and equipment only, even if the investment plan made reference to consumables.

“When the letters of intent were issued, both always made cross-reference to the investment plan,” Filletti rebutted.

In a previous sitting last Monday, former Malta Enterprise chairman Mario Vella confirmed that the letters of intent made no reference to consumables, and that the maximum amount Malta Enterprise could have offered as investment aid was €1.6 million.

Francalanza himself, who had already testified in a previous sitting, was the officer who had recommended approving the Progress Press funding application.

The consumables issue with regards to Progress Press’ investment aid relates to charges that the company defrauded Malta Enterprise through the transaction. 

The investment aid was used to finance the purchasing of printing equipment by Progress Press from Kasco Group, the latter belonging to former OPM Chief of Staff Keith Schembri.

However, Progress Press ended up paying $6.5 million extra for printing machines with the money shared between Adrian Hillman, Keith Schembri, and other business partners of the two.

READ ALSO: Progress Press defrauded of millions by two of its own directors and Keith Schembri

Apart from Francalanza, several witnesses took to the stand to provide information on Hillman’s company involvements. 

The hearing began with Inspector Leanne Bonello, who had been present for Hillman’s police statement. She said that his lawyers were present for the statement, and that Hillman chose not to respond to questions relating to his companies.

Hillman was asked whether he had personally met with Brian Tonna and Karl Cini, but he did not respond, according to Bonello.

MFSA employee Daniel Theuma also testified, exhibiting pen drives containing a spreadsheet of transactions that were reported to the authority.

Nine transactions were recorded, Theuma said.

A representative from the Malta Business Registry presented information on Hillman’s companies, covering 2004 till 2016.

From the Inland Revenue Department, one official presented Hillman’s tax returns covering 2005 to 2007, and 2017 to 2019. He also presented rent statements, while giving an overview of Hillman’s income documentation.

Magistrate Donatella Frendo Dimech is presiding over the case. Stefano Filletti and Nicole Galea appeared as defence counsel.

Inspector Joseph Xerri is prosecuting, aided by lawyers Antoine Agius Bonnici, Andrea Zammit and Sean Xerri DeCaro from the Attorney General's office.