Former director cleared of €588,000 VAT misappropriation

The former director of Penza Tarmac Limited has been acquitted of misappropriation charges relating to alleged unpaid VAT totalling €588,527.87.

70-year-old Carmel Penza was charged with misappropriation in his personal capacity and also as director of the company.

The charges date back to 2009. The accused did not admit the charges brought against him.

Following an appeal by Penza, the court issued a decree on 16 April 2024, granting his request to exclude his statement on 22 September 2009. The decree also declared inadmissible any references to that statement in current proceedings, including a police inspector’s testimony. 

Key prosecution witnesses included a representative of the VAT Department, who presented documents including VAT registration forms, company records, and VAT returns showing a balance due of €573,527.87. Azzopardi confirmed that Penza made a payment of €15,000 on 4 March 2011. 

An MFSA representative also exhibited the updated memorandum and articles of association of Penza Tarmac Limited, which confirmed Penza as director from the start and secretary from 7 April 2010. 

Inspector Curmi had testified that the VAT Commissioner had requested police action against the company and Penza for failing to pay over €500,000 in VAT. However, through a decree issued in April 2024, any references to Curmi’s earlier statements were deemed inadmissible.

The court referenced jurisprudence, which established that misappropriation occurs not through mere deception but when entrusted property is converted for personal use with the intent to claim it as one’s own. The court noted that the only available evidence was the testimony from the MFSA and the VAT Department. 

Penza’s statement was also excluded, and no other evidence such as bank records or accountant testimony was presented. The court concluded that the prosecution had failed to prove beyond reasonable doubt that Penza personally received or used the VAT funds for his own benefit.

Thus, Carmel Penza was found not guilty of all charges.

Magistrate Yana Micallef Stafrace handed down the judgement.