Debt ruse sheds light on More Supermarket’s mystery financiers

New light was shed on the operation of the More Supermarkets, the chain of stores that went bust after its owner, Ryan Schembri, fled the country and left behind millions in debts owed to suppliers and a multitude of lenders back in 2014. 

The court decision handed down in the past week crowned one of the more mysterious aspects of the operation: two mysterious lenders who claimed a €3.5 million debt on the stores, had their claim thrown out by Mr Justice Ian Spiteri Bailey.

Key to the story is the dramatis personae of the protagonists: the plaintiff, who challenged the debt, was the new More Supermarkets owner Darren Casha, a longtime lender to the chain run by Schembri; and Adrian Agius ‘tal-Maksar’, the man accused of ordering the murder of More Supermarkets lender Carmel Chircop, whose brother Robert and associate Jamie Vella stand accused of supplying the bomb that killed Daphne Caruana Galizia. 

Nothing could be more ‘Maltese’ in this story of characters set six degrees apart: Schembri, fugitive who left his family behind to hole up in London with his partner Aviva Kushner after running off to Dubai, is the cousin of disgraced Muscat chief of staff Keith Schembri. The mysterious bust of the supermarket, rumoured to have tallied €40 million in debt, was itself the springboard for Caruana Galizia to reveal the name of Adrian Agius as part of the Ryan Schembri ‘cartel’ that was allegedly financing this supermarket and food import business with loans of undeclared cash from major business people. 

Much of these transactions are now bound to be the subject of FIAU investigations: one of them is the share transfer of the business of five of the six More stores to creditor Darren Casha, popularly known as the owner of the Medasia restaurant and lido; the sixth store, More Hamrun, whose directors included Adrian Agius itself had not been sold to Casha in this transaction. The Court has also flagged other suspicious transactions to the FIAU, namely the alleged €1 million debt that retailer Alexander Farrugia claimed he had passed on from mystery lender Abdul Rahman to Schembri; while Farrugia and Mugliett’s claims of a €300,000 VAT refund ruse have been referred to the Tax Commissioner and Police Commissioner for action. 

And the notary who sat in for the false constitution of debt, Claire Camilleri, has also been referred to the Notarial Council to deliberate on her role in facilitating the constitution of debt.

Bogus debt 

Medasia owner Darren Casha, who challenged the €3.5 million claim from Edmond Mugliett and Alex Farrugia – allegedly extraneous entirely to the operations of the supermarket – had claimed in court that Schembri had conspired with ‘Maksar’ gang suspect Adrian Agius to bleed the company with the bogus claim as the chain’s creditors lined up to get their cash back. 

Casha stepped in to stop the claim in December 2014, accusing Schembri and Agius of roping in Mugliett, who acquired the remnants of media house WE Media, and undergarments retailer Alex Farrugia to create a constitution of debt for €2 million and €1.5 million against the supermarket chain, without having such authority. 

Ryan Schembri (left) and Darren Casha

Casha claimed these alleged debts to Ryan Schembri’s supermarket expansion, were made on behalf of mystery lenders that the two strawmen could not identify. “It seems other companies gave Mugliett and Farrugia instructions to pass on the money, without us knowing who they are or for what. How have these companies not presented themselves personally to claim their dues?... there’s nothing in More’s records of dealings with either Mugliett or Farrugia,” Casha had told the court. 

“To me this was another confirmation that this was Schembri’s ruse, and that Mugliett and Farrugia are involved with him in a bid to take from More Supermarkets something they are not entitled to.” 

Casha was already a major creditor of the supermarket chain, having loaned Schembri at least €5.7 million in the years before he decided to take over the entire operation, sometime in May 2014, for just €94,000. 

The recent court decision further explains that Casha was acting as a guarantor of loans to Schembri: €8.4 million loaned in a business styled as Copacabana Investments, and another with developer Adrian Zamit for €2.2 million. These debts were the subject of criminal complaints to the police, Casha told the courts, but were unconnected to the supermarket business. 

But after the More share transfer to Casha, Ryan Schembri and Adrian Agius – who were retained as directors of More’s Hamrun outlet – created the €3.5 million constitution of debt, unbeknownst to Casha. 

Casha found out in October 2014, by which time Schembri had fled the island. “It was the start of summer and I was only just getting the hang of the business, with a new store about to open,” Casha claimed in his affidavit. “I planned to keep the old directors in Hamrun so that they help me out, so that I get a proper handover as indeed I did from Camilleri and Delia particularly,” he said, explaining why Schembri, Adrian Agius, Chris Delia and Kurt Camilleri had been retained as directors of the Hamrun store despite him buying the entire chain.

Mystery investor 

Alex Farrugia’s story was that he had travelled to Libya with Ryan Schembri with plans to expand his textile retail together with More’s expansion in the war-torn country, specifically at the Palm City complex in Jumeirah, outside Tripoli. There, Farrugia allegedly met the mysterious Indian entrepreneur named Abdul Rahman at a construction fair. 

He also met Casha in Paris at the Sial food business fair, together with Schembri, with whom the two were apparently partners in the Sorriso Food brand of imported meats, a trademark owned by a Libyan company Copacabana Investments Group, and represented by Libyan trader Mohammed Emhemmed. Copacabana had appointed Cassar & Schembri Marketing (the trading arm for the More Supermarkets chain) as its agent. 

Farrugia claimed he had been approached to source a €1 million loan for More Supermarkets, money alleged obtained from Abdual Rahman. Yet Farrugia told the court he had neither a written agreement with said Rahman, nor a power-of-attorney to appear on a constitution of debt with Schembri. 

Still he insisted that Rahman’s investment did pass on to Cassar & Schembri Marketing, and that Schembri even tried to rope him in as a shareholder, an offer he refused because he wanted loan notes for the Rahman cash. Yet there was never any sign in the Maltese courts from the enigmatic Rahman to front the legal request to have his money returned.

Croatian ruse 

Casha also claimed that, prior to his May 2014 acquisition, Ryan Schembri came up with a ruse for his creditors that a Croatian criminal investigation was threatening to snowball into Malta and lead to an asset freeze on More Supermarkets. According to Mugliett, this was a money laundering investigation. 

At a certain point, Schembri even toyed with the idea of a bond issue for the More supermarket chain, meeting KPMG representatives together with Darren Casha and his associates Adrian Zammit and Ray Camilleri, and Schembri’s own business consultant – Edmond Mugliett. 

The public offering never came to fruition. 

Over that summer of 2014, Schembri was admitted to St James Hospital with heart problems. 

Farrugia, testifying in court, claims it was Schembri who informed him of a “certain Edmond Mugliett” who was chasing the supermarket chain for a hefty debt, and suggested that he enter the constitution of debt to lay claim to the debt. Farrugia even alleged that in transferring ownership to Casha, Schembri was trying to misappropriate a €300,000 VAT refund on the supermarket’s shelving and furniture to settle his debts. Darren Casha disputed this claim in court, saying nothing in the books for the supermarket chain reflected the €3.5 million claimed by Farrugia and Mugliett. 

Additionally, the constitution of debt was signed without Ryan Schembri being present. Instead it was his father Mario, togeter with More Hamrun director Adrian Agius, whom Casha said had no authority to appear on such a contract. 

Farrugia’s claims were also challenged by More Supermarket’s accountant Dennis Francalanza, disputing the claim that Farrugia – who ran the supermarket’s ‘Sock Corner’ outlet – could have poured in €1.5. million into the enterprise. 

Francalanza said it was in the time in May 2014 that Schembri “disappeared” to Croatia, that the operation was suddenly taken over by Darren Casha, Ray Camileri and Adrian Agius. 

Upon his return to Malta, Schembri set up Erom Trading (‘More’ spelt backwards) and informed Francalanza that Edmond Mugliett would start doing the company’s accounts. “On 17 October, as we were just about to wind up the Paceville outlet, a court marshall presented us two garnishee orders, one of €1.5 million from Alex Farrugia, and the other of €2 million from Mugliett. We were surprised at the origin of these orders.” 

Adrian Agius: phantom director? 

It is unclear what role Adrian Agius had in the running of the More Hamrun supermarket. Today, Agius is in prison facing charges of having ordered the murder of lawyer Carmel Chircop, who had loaned a substantial sum, €750,000, to Ryan Schembri and Erom Trading. Together with Schembri’s business partner Etienne Cassar, Agius was the debtor for the €750,000 loan. Agius had been one of the men first arrested by police in December 2017 in connection with the assassination of Daphne Caruana Galizia, and later released on police bail. 

Adrian Agius (right) has been charged as the mastermind behind the murder of lawyer Carmel Chircop (left) who was a lender to the More Supermarket chain

At the time, Schembri, Cassar and Agius, owned shares in another joint company called InterAA Holdings. 

When prior to his arrest in 2020, Agius testified in the €3.5 million More debt case, Agius said he had no effective role in the running of the outlet. “I trusted Schembri with my eyes closed,” he said, claiming his disinterest in the running of the business he was a director of was wantonly limited. “I passed on my shares to Darren Casha without collecting a cent, because until then I expected that those shares would return once things get back on their feet... I just rested on Ryan’s word, because I don’t understand anything about supermarkets. Schembri would lead. But I did work from Ryan’s office basically. My office was his, and I would hear about things going on.” 

And yet despite this kind of proximity, Agius claimed he was unaware of Schembri’s plans for a bond issue with KPMG, but was easily convinced that More Supermarkets owed Schembri and Mugliett €3.5 million. “Schembri told me I had to sign as a guarantor for their debt. In truth this did not suit me... apparently it was money to Ryan for projects he was investing in.” 

Casha’s lawyer pointed out to Agius that he had been a shareholder from day one at More Supermarkets, yet right up until the share transfer to Casha, he had no idea of the Mugliett-Farrugia loans. “Look, I didn’t know because... I would just hear them talk in the office. I never cared much. My fault really...” Agius replied. 

The courts this week determined that Mugliette’s alleged €2 million loan, from companies he claimed to be their ultimate beneficial owner – All Seas Management and Blue Finance – was lacking all proof that the money loaned was used for equipment purchased by Cassar & Schembri Ltd; indeed, no money was ever received from the company. 

“Nothing kept Farrugia and Mugliette from filing injunctions in court to claim their debt... no evidence was submitted of their claims,” the Court said, finding the constitution of debt to have been a false instrument all along.