Two years down the line, party companies still breaking the law

Companies owned by both the Nationalist and Labour parties remain in breach of company law by failing to publish their accounts

Companies owned by the Nationalist and Labour parties remain in breach of company law, despite reassurances from both parties over the last two years that they were working to regularise their position.

MaltaToday first sought answers from the two major parties two years ago about the fact that none of their subsidiaries – at least six for the Labour party and two for the PN – had submitted audited accounts with the MFSA, as is required at law.

MLP Holdings, which is owned by the Labour Party, for example, hasn’t filed accounts since 2000, according to the Registry of Companies website. The PN’s media wing, Media.Link hasn’t filed accounts since 2005.

The Companies Act requires companies to keep proper accounting records and to deliver a copy of the annual accounts laid and the auditors’ and directors’ report every year to the companies registrar.

Annual accounts, along with other company documents and details of directors and shareholders, are publicly available for viewing, showing that currently seven companies owned by the two main political parties – five owned by PL and two owned by PN – are in breach of this obligation.

While the parties’ companies aren’t alone – 18% of registered companies as of March 2017 had missed at least one deadline – both had acknowledged that they were in breach of the law and pledge to address the matter.

Then Labour Party chief executive Gino Cauchi had said in 2017 that the party would be submitting the accounts in due course and justified the situation by pointing out that the company Sunrise Travel had not operated since 2013, while two other companies – MLP Holdings and Consultancy & Research – were non-trading companies.

Nevertheless, the Companies Act makes no exceptions for non-trading or ‘non-operational’ companies. 

A year later, the party’s new chief executive Randolph Debattista told MaltaToday that “the necessary work is under way in order for the Labour Party’s subsidiaries to regularise their position in the shortest time possible”.

Similarly, a spokesperson for the PN had, in 2017, said that the party was “focusing on regularising fully its position within the shortest time-frame possible”.

MaltaToday has again reached out to the parties, to ask how it is possible that two years down the line, no apparent progress has been made in this regard.

The parties were also asked how they can expect to be taken seriously when they speak about respecting the country’s institutions and protecting its financial services sector, and they themselves are not leading by example and ensuring the transparency required at law.

A PN spokesperson said that “as previously stated the Nationalist Party is doing its utmost to regularise the position of its companies and acknowledges that this is unfortunately taking longer than expected... The task of getting all accounts finalised and audited requires substantial technical human resources which are very difficult to find and retain”.

“We assure the public that all effort is being put in to submit all documentation related to the Party's commercial companies as required by law, in the shortest time possible,” the spokesperson said.

Questions sent to the Labour Party CEO went unanswered.

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