Galdes family link to housing contractor raised red flags

A social housing contractor’s business ties with the social housing minister’s younger brother raised potential red flags within Malta’s anti-money laundering unit in 2021.

Roderick Galdes resigned last night ahead of these new revelations, citing "synchronised attacks to ruin my political career, as well as personal attacks even on my family”.

Galdes said in a statement that his resignation will now “ensure he is in a position to defend his and his family’s integrity”, ensuring the “full truth” will emerge.

Analysis by the FIAU, an anti-money laundering body, flagged how works on two multi-million-euro public social housing projects were subcontracted in 2019 to a newly set-up company owned at the time by an Italian associate of Malcolm Galdes, the former minister's brother. 

The company, LAM Projects, was set up in 2018, with the FIAU noting how it had been subcontracted works on the Siġġiewi and Msida social housing projects by Bonnici Brothers, despite having no apparent prior experience in the Maltese construction sector.

Although Malcolm Galdes was not a shareholder or director of LAM Projects, the FIAU described him as a “close business partner” of its then owner Lorenzo di Pinto.

Corporate records confirm Galdes' brother used to be partnered with di Pinto in other business ventures, including a construction company called Malta Luxury Construction Limited and a phone retail company that shared the same registered address as LAM.

Further red flags were raised about “cash deposits” that went into accounts controlled by Malcolm Galdes.

Roderick Galdes (right) with his brother Malcolm.

Family members of public officials face tighter checks under anti-money laundering laws as they can be used as conduits for public contracts and funds.

Di Pinto officially relinquished his shares in LAM Projects in May 2020, however according to the FIAU, he continued to exert a degree of financial control over the company until at least November of that same year.

The company has failed to post any financial accounts since its inception in 2018.

A spokesperson for the FIAU declined to comment on case-specific information when contacted by Times of Malta.

Relations between Bonnici Brothers and LAM Projects would later sour, with a Bonnici Brothers subsidiary filing a lawsuit in 2022 claiming LAM failed to carry out €450,000 worth of work it had already been paid for on the social housing projects and other unrelated works it had been hired to do.

Roderick Galdes has been under scrutiny after Marlene Mizzi, a former Malita Investments chairperson, publicly accused him of “hobnobbing” with social housing contractors and interfering in Malita’s work.

Malita Investments did not fall under Galdes’ portfolio at the time the contracts were awarded to the Bonnici Brothers subsidiary, although he was already serving as social housing minister.

He inaugurated the opening of the Msida social housing project in 2024.

Speaking ahead of the minister's resignation, a spokesperson for Galdes denied any suggestion of wrongdoing.

“Kindly note that  Roderick Galdes and his family, including his brother, have no connection whatsoever with LAM Projects or with any construction activities mentioned.

“Furthermore, Galdes’ brother was never a director or shareholder of any company that was awarded tenders related to the housing sector. In addition, in 2019, minister Galdes did not even have responsibility for Malita Investments within his portfolio.

LAM Projects was subcontracted work on the Msida social housing project. Photo: Matthew Mirabelli

“Galdes categorically rejects any implication of wrongdoing or conflict of interest in this matter,” the spokesperson said.

Ever since Malita Investments was shifted to his portfolio in 2023, it has faced delays to its social housing projects amid a liquidity crunch due to cost overruns.

Galdes is the subject of a police probe triggered by ex-MP Jason Azzopardi over claims of unexplained wealth tied to his notable property portfolio.

Inside the subcontracting deal

Civil court filings reviewed by Times of Malta confirm LAM Projects was engaged to work on two construction projects for 84 social housing apartments in Siġġiewi and 102 apartments in Msida.

Contracts for these works were awarded by Malita Investments to Amici Projects, a company owned by Bonnici Brothers, who are established players in the construction sector. 

Bonnici Brothers, in turn, subcontracted the housing works in 2019 to LAM Projects, a turnkey construction firm owned at the time by di Pinto.

LAM Projects was given a €2 million advance by Bonnici Brothers for works on the two social housing projects and other unrelated ventures, according to legal filings.

LAM Projects was also subcontracted work on the Siġġiewi social housing project. Photo: Matthew Mirabelli

The arrangement led the FIAU to question why a major player in the construction sector would engage a newly set-up company, with no prior track record in Malta, to carry out the social housing works.

Three years after the subcontracting deal, Amici Projects sued LAM Projects, claiming the firm had failed to carry out €450,000 worth of the work it had been paid for.

As evidence of the arrangement, Bonnici Brothers presented three subcontracting agreements it had signed with LAM Projects, two of which were for the social housing projects.

The two contracts were signed by di Pinto on behalf of LAM Projects in January and August 2019.

Last year, an appeals court confirmed an order for LAM Projects to repay the €450,000 for the uncompleted works.

Responding to a request for comment by Times of Malta, LAM Projects’ lawyer said he formally relinquished the brief after having lost contact.

Times of Malta attempted to contact di Pinto via another representative.

Bonnici Brothers, Malcolm Galdes and Malita Investments did not respond to a request for comment.