Malita Investments violated MFSA good governance code

Malita Investments violated the financial services watchdog’s corporate good governance code by concentrating oversight and decision-making powers in one individual.

The government company, partly owned by private investors, acknowledged in its annual report it failed to “consistently” adhere to one of the principles in the code saying the role of chairman and CEO should be held by different individuals.

Johan Farrugia was handed the dual role of company board chairperson and CEO in April 2025, which he occupied until his resignation eight months later.

The Malta Financial Services Authority’s code of good corporate governance says there should be a clear division of responsibilities between the running of the board and the executive responsibility for the company’s running.

Malita has seen a carousel of high-level resignations amid financial troubles and delays to its flagship social housing projects. Within the space of a year, it cycled through multiple CEOs and chairpersons.

Amanda Desira occupied the role of interim CEO until April 2025 before Farrugia took over as both CEO and chair. Former tax commissioner Marvin Gaerty replaced Farrugia in November 2025 as executive chairperson and Marlene Attard was appointed CEO this January. Gaerty was sidelined just three months later when Roderick Psaila was appointed non-executive chair.

Johann Farrugia occupied the dual role of chairperson and CEO.

€2.6m loss

The company made a €2.6 million operating loss in 2025, a significant swing from the €10.1 million profit the previous year. As a result of its tight finances, shareholders will not receive a dividend on their investment.

The directors recommended that, in light of Malita’s financial position, cash flow requirements and ongoing capital commitments, no dividend should be paid for 2025.

Malita’s cash crunch also drew the attention of its auditors KPMG. Auditors flagged how Malita’s ability to continue operating as a going concern is entirely contingent on a €28 million loan from Bank of Valletta and an existing €22 million credit facility with the European Investment Bank.

KPMG further emphasised a disclosure by Malita that the National Audit Office (NAO) has signalled its intention to investigate it for compliance with “public listed company regulatory requirements”. Malita said it has formally responded and confirmed its willingness to fully cooperate and provide any information requested by the NAO.

The company said in its annual report that it is not yet aware of the specific scope of the NAO’s investigation.

Opposition MPs called on the NAO to investigate Malita in light of “serious allegations of poor governance”, including alleged interference by then housing minister Roderick Galdes. He resigned as minister in January, the day before Times of Malta revealed that his brother has links to an Italian contractor who worked on Malita social housing projects.

Ex-MP Jason Azzopardi has also called on the NAO to investigate cost overruns at Malita, and has filed a criminal complaint demanding a probe into the ex-minister's "unexplained wealth".