Bank loans will help fund Sadeen education facility

The promised €104 million investment in the proposed new higher education institution would come from investor funds and international banks, the government said.

The information was given after the Times of Malta raised the matter when concerns on funding were raised during a parliamentary debate last week on the transfer of public land to Sadeen Education Investment Ltd.

It emerged the company was set up with seed capital of €1,200, the minimum required. This was increased to €1.2 million at a later stage but Nationalist MP Francis Zammit Dimech asked where the rest of the financing would come from.

Questioned further on the matter by this newspaper, Dr Zammit Dimech said that while the share capital could be topped up later, as had already occurred, there was still a gulf of missing funds, considering the promised investment.

The investor could also choose to invest his own funds ­– a shareholder’s loan – but, considering that the company was “a one-man show” this would mean he would be lending money to himself, Dr Zammit Dimech said.

Otherwise, he added, the investor would need to resort to loans, raising the question of whether he would turn to local banks.

Dr Zammit Dimech also pointed out the company behind the education facility was a limited liability company despite investor Hani Hasan Salah filling all the company roles from director to company secretary. Only one share is assigned to another individual – his relative Rakan Hani Hasan Salah. The address for both is a PO Box in Amman, Jordan.

This was an unusual set-up for what was supposed to be a university, given prime coastal public land in Outside Development Zones at Żonqor Point in Marsascala and Dock 1 in Cospicua.

The government defended the investment. “Share capital and project finance are completely unrelated. The projected investment for the setting up of the university is of €104 million.

“Project financing is coming from investor funds and international bank finance,” it said, adding that “the group” had a good credit reputation with international banks.

“By local standards the share capital held by Sadeen Education Investment Ltd today is abnormally high,” a government spokes-man added.

It emerged during the parliamentary debate that the company had in fact applied for a licence to operate a higher education institution, rather than what was initially announced as the American University of Malta backed by De Paul University.

As the saga on the controversy unfolded, De Paul immediately made it clear their involvement was limited to the development of the curriculum and they would not be involved in operations. Company documents show the registered address for Sadeen Education Investment Ltd is in Mriehel – the address of financial services firm RSM (Malta), which belongs to Deo Scerri, who is the Labour Party’s auditor.

The political links to the party in government was of concern, Dr Zammit Dimech said. “At the very least it shows that the company has no formal set-up here.”

Questions sent to Sadeen Education Investment Ltd last week have remained unanswered.

caroline.muscat@timesofmalta.com