Offshore entity for China-Malta investment, involving 'Sai', brought to light by Egrant inquiry

Konrad Mizzi says proposed investment was never pursued and was declined

Konrad Mizzi (left) with Shanghai Electric representatives. Cheng Chen is not in this photograph
Konrad Mizzi (left) with Shanghai Electric representatives. Cheng Chen is not in this photograph

The full Egrant inquiry report has brought to light an entity which would have been the sole promoter of investment between China and Malta while being controlled by an offshore holding company.

The report delved into emails which showed “a close relationship” between Konrad Mizzi, Keith Schembri and Nexia BT’s Brian Tonna and in which a public-private partnership for a “MACHIN Project” is mentioned.

The MACHIN Project would have been an entity for the promotion of China-Malta investment, and would be registered in Malta but 100% controlled by a holding company in the British Virgin Islands.

The emails, which were analysed by forensic accountant Miroslava Milenovic, involved communication which took place in June 2014 between Schembri and Mizzi, which itself related to an email received by Mizzi from Cheng Chen of Shanghai Electric Power, which owns a large chunk of Enemalta.

In Chen’s redacted email cited in the report, he speaks about a meeting with Mizzi, Schembri and Tonna “to finalise [a] business model (…) energy-related topics, real estate, tourism (…)meeting with Maltese experts to understand the potential as off-shore investment hub for Chinese (…).

The report says that MACHIN Project would have been authorised by Malta’s government as the only Maltese representative investment promotion agency in China.

Further communication showed that “the cooperative mechanism shall be set with a certain person named Sai”. The report says this could be Sai Mizzi Liang, Konrad Mizzi’s wife.

An emigration agency setup in China was also proposed in the emails.

“Through this model a Value chain for Chinese Applicants has been created in order to be in a position to submit request for Maltese identity documents” the report says.

The report also identifies Chen as a client of Nexia BT. “They have provided him support in becoming the owner of the company Torbridge Services Inc from BVI. This company has opened bank account in Pilatus Bank.”

Torbridge is one of the companies set up in the BVI by Nexia BT partner Karl Cini, which another portion of the Egrant report says he failed to mention under oath. The report recommends that Cini should be investigated by the Police Commissioner for possibly lying under oath.

In her blog, Daphne Caruana Galizia had made reference, in multiple posts, to both Torbridge and Chen.

In May 2016, she wrote that Tonna had set up a secret offshore company in the BVI - which she names as Torbridge Services Inc - for Chen, whom she described as “one of the Chinese officials who was a key part of negotiations in the purchase by Shanghai Electric Power of the Delimara power station and a 33% stake in Enemalta.”

MACHIN Project proposal was not pursued - Mizzi

In a reaction to the information emerging from the full Egrant report, Mizzi said in a press release issued this evening that MACHIN Project was a proposal received by the government, but which was never pursued nor developed, and was declined.

He underlined that Sai Mizzi was never approached to work on the proposal.

“The Egrant Inc Inquiry report refers to a proposal for a Public Private Partnership received by the Government of Malta in 2014 from a Chinese national who, at the time, worked as a consultant with expertise in commerce and investment from China. This was a proposal for cooperation with the Government of Malta for the creation of an entity to be registered in Malta, which would serve as a catalyst for Chinese investors,” Mizzi said.

“Government receives several proposals for investment, some of which take the shape of a cooperation with Government. The proposal mentioned in the Egrant Inquiry report was not pursued, was not developed, and was therefore declined. Sai Mizzi, who, at the time acted as the representative of Malta Enterprise in China, was not even approached to work on this proposal.

“I understand that all relevant information was available to the Inquiring Magistrate. I am satisfied that the Inquiry confirmed that I never had bank accounts at Pilatus Bank, never received funds from Azerbaijan, and never committed money laundering. All allegations made against me turned out to be false.”

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